Luxury car maker Mercedes-Benz has said that it was not interested in investing in the Centre’s Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) which the government notified recently.
HD Kumaraswamy, Minister for Steel and Heavy Industries, while releasing the Guidelines of the Scheme on June 3, had said companies like Mercedes-Benz, Hyundai, Kia, Skoda-Volkswagen were keen on participating in the scheme. But the companies are apparently not so keen.
“We have already invested in India with manufacturing. We were the first luxury car brand to start manufacturing an EV in India where Road and Transport Minister Nitin Gadkari inaugurated the line. The scheme is very good for new players; those who want to come to India and localise and start. But, we are there in India for 30 years, and our R&D set-up has been huge...so for for us there is no case of new investment,” Santosh Iyer, Managing Director and CEO, Mercedes-Benz India, told businessline.
It could be a good scheme for the companies looking at high volume electric cars, but not for the luxury car makers who have limited number of EVs, he added.
Under the SPMEPCI, the EV makers require a minimum investment of ₹4,150 crore (around $500 million) for three years during which they have to set up a manufacturing facility and commence operations and roll out a vehicle.
The electric carmakers also must have minimum domestic value addition (DVA) of 25 per cent to be achieved within those three years and minimum DCA of 50 per cent to be achieved within five years from date of issuance of approval letter by MHI.
The approved applicants will also be allowed to import completely built units (CBUs) of electric four-wheelers (e-4Ws) manufactured by global group companies with a minimum cost value (CIF) of $35,000 at reduced customs duty of 15 per cent for a period of five years from application approval date.
However, established foreign players who already have subsidies here and have been investing in India for decades do not want to further invest in a separate line for the electric cars.
Both Hyundai and Škoda Auto Volkswagen India Private Limited (SAVWIPL) said that they were still monitoring the developments and will decide at an appropriate time.
Future of mobility
“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. Based on this, we define the appropriate next steps in line with our long-term strategy,” said a company spokesperson.
The spokesperson said the company fully supports and remains committed to initiatives that lead to a sustainable and self-sufficient “battery electric vehicle ecosystem in India”.
“Hyundai Motor India is currently in the process of studying the details of the scheme to better understand its framework, scope, and potential implications. We remain committed to contributing meaningfully to India’s mobility transformation journey,” said a company spokesperson.
Queries sent to Kia India did not elicit any response till the time of going to press.