Indian Government’s Electric Vehicle Scheme Faces Lukewarm Response
The Indian government’s recent initiative to promote the manufacturing of electric passenger cars has not garnered the expected enthusiasm from all major automobile manufacturers. Mercedes-Benz, a prominent luxury car brand, has declared its lack of interest in investing under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI).
Contrary to earlier statements by HD Kumaraswamy, Minister for Steel and Heavy Industries, suggesting that companies like Mercedes-Benz, Hyundai, Kia, and Skoda-Volkswagen were eager to participate, these companies are now appearing less enthusiastic. Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, clarified that his company, having already established a significant presence in India and being the first luxury brand to manufacture electric vehicles locally, does not see the need for new investments under this scheme.
“We have already invested in India with manufacturing. We were the first luxury car brand to start manufacturing an EV in India,” Iyer stated. He emphasized that the scheme might be beneficial for new entrants or companies planning high-volume electric car production but is less relevant for established luxury car manufacturers with limited EV models.
The SPMEPCI requires a minimum investment of ₹4,150 crore over three years, along with specific domestic value addition (DVA) and domestic capital expenditure (DCA) targets. While this could attract new players, established foreign manufacturers like Mercedes-Benz seem hesitant to commit additional resources for separate electric vehicle production lines.
Other manufacturers, such as Hyundai and Škoda Auto Volkswagen India Private Limited (SAVWIPL), are still in the process of evaluating the scheme’s details. “The future of mobility will be electric. SAVWIPL is closely monitoring the development of EV-related policies in India and is thoroughly assessing their implications,” a company spokesperson commented, highlighting their commitment to a sustainable battery electric vehicle ecosystem in India.
Similarly, Hyundai Motor India is studying the scheme to understand its framework and potential implications better. The company’s commitment to India’s mobility transformation journey remains unchanged, according to a spokesperson.
The response from major automobile manufacturers indicates a mixed reaction to the government’s efforts to boost electric vehicle production in India. While some are cautious, others continue to show their commitment to the country’s transition towards electric mobility.
