India Will Hike Tariffs to Boost Local EV Production

India plans to raise taxes on imported electric vehicle components and batteries to encourage local EV production.

The stepped process would begin by doubling levies on imported electric trucks and buses to 50% in April 2020. Fees on such vehicles that arrive as partially assembled kits would rise to 25% from 15%.

The government plan would double taxes on imported electric passenger vehicles to 30%, beginning in April 2020. Such vehicles in semi-assembled kit form would double to 30%.

The scheme would triple tariffs on imported batteries used in locally produced EVs to 15%, beginning April 2021. At the same time, duties on imported lithium-ion cells for local assembly into batteries would double to 10%.

A variety of imported EV powertrain components—such as charger, motors, controller and regenerative brakes—which are not taxed now would face a 15% tariff in April 2021.

India has proposed spending $1.4 billion over the next three years to help the country build a domestic EV production base. The plan, called FAME II (short for faster adoption and manufacturing of electric vehicles in India) also call for installing 2,700 charging stations in the country. The facilities would be arranged within 3 square kilometers of each other.