Synopsis
International brokerage firms have commended India's evolving electric vehicle policy, which facilitates seamless entry for companies like Tesla. This policy is anticipated to enhance EV adoption, expand charging infrastructure, and create growth opportunities for domestic manufacturers.Key Takeaways
- India's EV policy is set to boost electric vehicle adoption.
- Tesla's entry requires local manufacturing to succeed.
- EV penetration in cars to rise from 2% to 5% by FY27.
- Two-wheeler adoption expected to reach 20% by FY30.
- India’s charging infrastructure is likely to expand.
New Delhi, Feb 24 (NationPress) Global brokerage firms and major financial services have praised India’s developing electric vehicle (EV) policy, which will facilitate companies like Tesla to enter the market effortlessly.
As per Nomura, India’s EV policy aims to accelerate the adoption of electric vehicles, simplifying investment opportunities for Tesla and other international automakers.
This policy transformation is also anticipated to enhance India’s charging infrastructure, benefiting essential suppliers.
“The EV penetration in cars, which has hovered around approximately 2 percent for the last two years, is projected to rise to about 5 percent/9 percent by FY27/FY30F,” states the report.
The forecast indicates a growth to 5 percent by FY27 and further to 9 percent by FY30.
In a similar vein, the uptake of electric two-wheelers (2Ws) is expected to grow from 5.8 percent in FY25 to 10 percent by FY27 and reach 20 percent by FY30, according to the findings.
Local auto component manufacturers that already supply parts to Tesla’s US operations may see an increase in orders if Tesla sets up a factory in India.
Meanwhile, global brokerage CLSA mentioned that for Tesla to thrive in the burgeoning Indian EV market, it will be essential to produce its vehicles domestically and price them within the range of Rs 25 lakh-Rs 30 lakh.
According to CLSA, Tesla must establish manufacturing facilities in India to scale its current portfolio and “price its vehicles at under Rs 3.5-4 million (approximately Rs 35-40 lakh) on-road, even if import duties are lowered to below 20 percent.”
The brokerage further noted that Tesla's entry is unlikely to significantly impact local competitors like Maruti Suzuki India, Hyundai Motors India, and Tata Motors, as the EV penetration in India is still developing and presents ample growth prospects.
The current estimated EV penetration in India stands at approximately 2.4 percent.
As Tesla prepares for its entry into India this year, the government is reportedly modifying the terms of a new policy aimed at encouraging EV manufacturing within the nation. The Centre may also provide additional import duty relief.
