In a strategic move to bolster electric vehicle (EV) adoption and manufacturing, the Indian government has unveiled a new policy offering significant incentives to global automakers. The policy aims to attract foreign investment by reducing import duties for companies committing to local production.

Key Highlights of the Policy

Under the “Scheme to Promote Manufacturing of Electric Passenger Cars in India” (SPMEPCI), automakers investing a minimum of ₹4,150 crore (approximately $500 million) in local manufacturing within three years can import up to 8,000 EVs annually at a reduced customs duty of 15%, down from the previous rates of 70% to 110%.

To qualify, companies must meet revenue requirements once production begins. In the fourth year, approved firms are expected to report at least ₹50 billion in revenue, increasing to ₹75 billion in the fifth year. Failure to meet these targets could result in a penalty of up to 3% on the revenue gap.

The policy also mandates that automakers achieve 25% domestic value addition (DVA) by the third year, increasing to 50% by the fifth year.

Global Automakers’ Responses

Several global automakers have expressed interest in the new policy. Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia are considering setting up manufacturing operations in India to capitalize on the incentives.

However, Tesla has indicated a preference for establishing sales outlets without committing to local production, rendering it ineligible for the benefits under the new scheme.

Vietnam-based electric vehicle manufacturer VinFast’s planned $2 billion investment in establishing an EV manufacturing facility in Tamil Nadu has failed to qualify for benefits under India’s incentive scheme. To become eligible, VinFast must make an additional investment of ₹4,150 crore.

Domestic Automakers’ Concerns

Indian automakers, including Tata Motors and Mahindra & Mahindra, have raised concerns about the reduced import duties, fearing increased competition from global players. They argue that the policy could undermine domestic manufacturers who have already invested heavily in local EV production.

India’s EV Market Outlook

Currently, EVs make up only 2.5% of India’s car market. The government aims to boost this share to 30% by 2030. The new policy is a step towards achieving this goal by encouraging global participation in the Indian EV market.

Conclusion

India’s new EV policy presents both opportunities and challenges for global and domestic automakers. While the incentives are attractive, the stringent requirements and competitive landscape necessitate careful strategic planning. As the application window opens, the automotive industry will keenly observe how these developments unfold.

Tesla has experienced a significant drop in sales in Europe, with a 45% decline in the combined EU, EFTA (Iceland, Liechtenstein, Norway, and Switzerland), and UK markets compared to the same month last year. The drop is even steeper within the European Union alone, where Tesla’s sales fell by 50.3%. This occurs at a time when regional sales of battery-electric vehicles (BEVs) have increased by 37%, indicating that demand for electric vehicles is still strong, but Tesla is having trouble keeping up with the competition.

According to data from the European Automobile Manufacturers’ Association (ACEA), Tesla sold only 9,945 units in January 2025, a sharp decline from the 18,161 vehicles sold in January 2024. The most dramatic declines were observed in Germany, where sales dropped by 59.5% to just 1,277 units, and in France, where the decrease was 63%, bringing total sales down to 1,143 units. The situation becomes even more concerning when compared to Tesla’s competitors. China’s SAIC Motors, for instance, managed to sell more than twice as many units, delivering 22,994 vehicles in January.

Several factors may be contributing to Tesla’s underperformance. The increasingly negative press surrounding Elon Musk could be one reason. His controversial political statements, including support for Germany’s far-right AfD party and a jailed activist in the UK, have sparked significant criticism across Europe. This could be tarnishing Tesla’s brand image, leading to reduced consumer interest.
The anticipated Model Y refresh may also have an impact on Tesla’s sales. Many potential buyers may be delaying their purchases and opting to wait for the more recent model, as an updated version of Tesla’s best-selling vehicle is scheduled to be released in 2025.

Additionally, Tesla had to adjust its production lines to accommodate the refreshed Model Y, which may have caused a short-term supply disruption in January, resulting in fewer units available. Inventory shortages might also be playing a role in Tesla’s declining sales. According to reports, Tesla accelerated deliveries in December 2024 to meet goals for the year’s end, which may have depleted stock in some markets. Consequently, lower inventory levels in the beginning of 2025 may have had a negative impact on January sales figures. Despite Tesla’s struggles, the broader electric vehicle market in Europe continues to thrive. ACEA reports that 124,341 BEVs were sold in the EU, and 166,065 units were sold in the Europe+EFTA+UK region in January 2025.This growth has led to an increase in market share for BEVs, which now account for 16.7% of all vehicle sales in the region, up from 11.9% in January 2024.

Hybrids are still the most popular powertrain in Europe, despite the growing popularity of electric vehicles. Self-charging hybrid vehicles (HEVs) now hold a dominant 34.9% market share. Gasoline-powered vehicles follow with 29.2%, while BEVs have surpassed plug-in hybrid vehicles (PHEVs) and diesel cars in market share. Diesel only holds 8.8 percent of the market today, while PHEV sales make up 7.6 percent. The combined market share of gasoline and diesel cars in the European Union has decreased significantly, from 48.7 percent in January 2024 to 39.4 percent in January 2025. Overall, new car registrations in the EU fell by 2.6% to 831,201 units in January, with major declines observed in key markets like France (-6.2%), Italy (-5.8%), and Germany (-2.8%).

The difficulties that Tesla is currently experiencing in Europe highlight the difficulties that the company faces in maintaining its edge in the face of growing competition from established automakers and new Chinese brands. To regain momentum in the rapidly expanding European electric vehicle market, the company will need to address inventory issues, brand perception, and shifting consumer preferences.

Article By
Sourabh Gupta

The Trump organization has ended government financing for electric vehicle (EV) charging framework, a move that has started vulnerability and worry among states and industry pioneers. The choice to suspend billions of dollars distributed for EV chargers under the Public Electric Vehicle Foundation (NEVI) Recipe program has left states scrambling to change their arrangements and brought up issues about the fate of the country’s EV progress.

On Thursday night, the organization sent a mandate to states, training them to stop spending NEVI finances that were at first given under the Biden organization. President Donald Trump has been vocal about his dissatisfaction with regards to government spending on EV foundation, calling it a pointless channel on citizen cash. Nonetheless, industry specialists contend that this move could slow EV reception, disturb state projects, and at last put the U.S. vehicle industry in a tough spot in the worldwide shift towards jolt.

The Government Parkway Organization (FHWA), the office liable for administering NEVI financing, gave a request to states to quit carrying out their arrangements until new rules are given. A few states, for example, Alabama and Rhode Island, had proactively required their undertakings to be postponed following Trump’s introduction, however the most recent mandate cements a cross country freeze on governmentally financed EV charging drives. States with dynamic undertakings have generally gotten repayments from the central government, however those still in the preparation or contracting stages should now stop endlessly, unsure of when or on the other hand assuming they will actually want to continue.

NEVI was made as a component of the Biden organization’s Bipartisan Foundation Regulation in 2021 to address holes in the EV charging network, especially in rustic and underserved regions. Before the program, privately owned businesses had minimal impetus to introduce chargers in areas with low traffic volume, which prompted critical differences in charging access. NEVI tried to overcome this issue by giving $5 billion more than five years to states for building and growing charging foundation. Notwithstanding its aggressive objectives, the program confronted difficulties, for example, allowing delays, complex electrical redesigns, and extensive contracting processes. Reports show that roughly $3.3 billion of NEVI subsidizing had previously been distributed to states before the financing freeze.

The choice to stop EV charging reserves has not just made strategic and monetary hardships for states but on the other hand is supposed to bring about fights in court. Ryan Gallentine, overseeing chief at Cutting edge Energy Joined together, accentuated that the greater part of the unspent assets stay in state transportation division records and that states are not lawfully committed to stop their tasks dependent exclusively upon the organization’s declaration. He encouraged state transportation offices to keep executing their arrangements until new rules are given.

Other legitimate specialists contend that there is no lawful point of reference for impeding assets that have previously been endorsed and dispensed. Andrew Wishnia, previous appointee collaborator secretary for environment strategy at the Division of Transportation (Spot) and one of the designers of the NEVI program, brought up that there is no reasonable legitimate reason for the organization’s choice to stop the program. Lawful difficulties are normal from states and industry partners who view the move as a ridiculous disturbance of a governmentally supported drive.

Past lawful and monetary worries, the suspension of EV charging reserves affects EV reception. Numerous potential EV purchasers stay reluctant because of worries about charging availability, especially for really long travel. Loren McDonald, boss examiner at EV charging research firm Paren, noticed that range tension remaining parts a critical boundary to EV reception. He contended that without solid and advantageous charging choices, numerous customers would be hesitant to change to electric vehicles.

The choice to stop NEVI financing likewise influences intends to grow charging access in low-pay and high-thickness lodging regions, where private charging choices are restricted. NEVI financing was planned to help the organization of chargers in these areas to guarantee fair admittance to EV framework. The suspension of assets could slow down these endeavors, leaving numerous networks without sufficient charging choices.

Notwithstanding the government financing freeze, the confidential area keeps on assuming a critical part in extending EV charging networks. Organizations, for example, Tesla, which has gotten government finances before, have put vigorously in growing their charging framework. Industry pioneers accept that client interest for EVs will keep on driving interest in charging organizations, yet at a possibly more slow speed. Bassem Ammouri, head working official at EV Interface, communicated idealism that the general pattern of charging foundation development would endure, regardless of whether the speed eases back throughout the following couple of years.

In any case, a few specialists caution that deferring basic charging framework could make a cascading type of influence, easing back EV deals and ruining the change to zap. Matt Stephens-Rich, head of projects at the Jolt Alliance, featured the gamble of a drawn out defer in foundation extension prompting diminished shopper trust in EV reception.

The Trump organization’s transition to stop EV charging reserves has infused vulnerability into the U.S. EV market, leaving states in an in-between state and raising legitimate and monetary worries. While private interest in charging framework will proceed, the suspension of government backing could slow advance in basic regions, especially in underserved locales. As fights in court loom and states anticipate further direction, the fate of governmentally financed EV charging foundation in the U.S. stays unsure.

Article By
Sourabh Gupta