This is the title of a book written by Bill Gates in 1999 .
It contained some of the earliest hints of software developments , aimed at speeding up businesses
That was long before tech community started talking about Artificial Intelligence ( AI )
But 25 years later, some decisions are still being taken @ speed of a snail !
Context :
EV policy to attract global players, help India become manufacturing hub: Experts
The government on Friday approved an electric-vehicle policy, under which duty concessions will be given to companies setting up manufacturing units in the country with a minimum investment of USD 500 million, a move aimed at attracting major global players like US-based Tesla.
Aligned with the government's vision of reducing carbon footprint, promoting sustainable manufacturing, and achieving net-zero emissions by 2070, the policy sets the stage for a vibrant future-mobility global manufacturing hub in India, Marwah said.
ICRA currently expects about 15 per cent of new car sales to be electric by 2030, he added.
"Further, countries that have been front-runners in EV adoption have also developed a local vendor ecosystem. This policy is a step in the right direction and would aid in increasing EV components localisation in India, which is currently at 30-40 per cent," Dewan stated.
As per industry estimates, the total EV sales in India stood at around 10 lakh units in 2022.
Centre approves game-changing EV policy: Tesla arrival imminent .. TOI
Extract :
Key highlights of the policy include a minimum investment requirement of Rs 4,150 crore (approximately USD 500 million), with no ceiling on the maximum investment amount.
Companies establishing manufacturing facilities for EVs will be granted a three-year window to set up operations in India and to begin production of EVs. Furthermore, within a maximum period of five years, these manufacturers are mandated to achieve a 50 percent domestic value addition (DVA) during the manufacturing process. The policy also says that a localisation level of 25 percent must be achieved by the third year.
For the global players who intend to set up facilities in India, much like Elon Musk-led Tesla, limited imports of EVs will be permitted at a lower customs duty rate of 15 percent for vehicles with a minimum CIF (cost, insurance, freight) value of USD 35,000. At percent, an import duty of 70 percent is levied on the electric vehicles falling under this category.
However, this concessional rate will be applicable only if the manufacturer establishes manufacturing facilities in India within a three-year timeframe with an investment of USD 500 million. Speaking of Tesla, the US-based marque has been asking for a reduction in import taxes for a while now. Recently, another company VinFast from Vietnam also said they want the import taxes to be lower.
The amount of duty not paid on all the EVs allowed to be brought into the country will be limited to the money invested or Rs 6,484 crore, whichever is less. Also, no more than 40,000 EVs can be brought in each year, following specific rules. To make sure that companies follow the rules of the scheme, the manufacturers will have to provide a bank guarantee equal to the duty not paid, which will be used if they don't meet the specified criteria for domestic value addition (DVA) and investment.
India okays EV policy with tax relief to rev up manufacturing dream & lure foreign players like Tesla
Extract :
For vehicles with a minimum CIF (Cost, Insurance, and Freight) value of $35,000, a 15% customs duty (as applicable to Completely Knocked Down units) will be levied for a duration of five years, subject to the manufacturer setting up manufacturing facilities in India within a 3-year period. The duty foregone on the total number of EVs permitted for import will be capped at the investment made or ₹6,484 crore (equal to incentive under PLI scheme). Additionally, a maximum of 40,000 EVs, at a rate not exceeding 8,000 per year, will be allowed if the investment surpasses $800 million.
Manufacturers will be required to establish manufacturing facilities in India within a three-year timeline and commence commercial production of EVs. They must achieve a domestic value addition (DVA) of at least 50% within five years. Moreover, a localisation level of 25% by the third year is mandated.
Tesla at the gates, India rolls out red carpet for global EV makers
Extract :
Minimum Domestic Value Addition :
Ø Third Year ………………………………. 25 %
Ø Fifth Year ………………………………… 50 %
Only EVs worth over $ 35,000 ( approx. Rs 30 Lakh ) covered under the Scheme . Clubbing together local taxes and markrting margins, such an imported vehicle is expected to retail at closer to Rs 40 lakhs
According to Automobile Industry data, more than 80 % of the Indian Car Market , or 3.2 million annually, comprises cars retailing at less than Rs 15 lakh per unit
The total number of vehicles worth more than $ 35,000 a unit, being sold in the country is about LESS THAN a lakh and about 1 – 1.5 % of the total market
Sharply reduced rate of 15 % customs duty for upto 8,000 EVs annually imported by a company that commits to Make in India
Carry over of any unutilized annual import limits will be permitted
Joe Biden set to crack down on auto emissions to accelerate EV sales .. ET … 17 Mar 2024
Extract :
Emissions limits set to be finalised by the Environmental Protection Agency within days would propel electric vehicle sales well beyond current levels. The EPA has projected that to meet proposed mandates, electric models would need to make up roughly two-thirds of car and light truck sales in 2032 - up from less than a tenth last year.
The measure, which sets limits on smog-forming pollution, soot and carbon dioxide emissions, is seen as one of the most consequential climate regulations being imposed by President Joe Biden. It's also key to helping the US fulfill its Paris Agreement commitment to at least halve the country's greenhouse gas emissions by 2030. The transportation sector is the biggest source of planet-warming pollution in the US today.
"Cars and light trucks on their own are roughly 20% of the carbon footprint," said Manish Bapna, head of the Natural Resources Defense Action Fund. Cutting that is "absolutely essential to real, concrete progress."
My Take :
After reading my following e-mails ( to our Cabinet Ministers and to Elon Musk ) , if you feel that this ( dialogue between Govt and Musk ) has been more of a “ Sparring Game “ , you cannot be blamed :
Ø Will Tesla follow Apple ? …………………………….. 23 May 2017
Extract :
Govt has proposed to Apple , the following Phased Manufacturing Program ( PMP ) :
2017-18 :
Mechanics , Die-cast parts, Microphone and Receiver , Key Pad and USB cable
2018-19 :
Populated Printed Circuit Boards, Camera Modules, and Connectors
2019-20 :
Display Assembly, Touch Panels , Vibrator Motor and Ringer
Nothing revolutionary here to anyone who applied for an Industrial Manufacturing License , around 1970 !
And , even provide the figures of increasing “ local content ( by value ) “ in the selling price of the product proposed to be manufactured locally ( indigenization )
And even provide , figures of “ Anticipated Value “ of Import Licenses required for each phase ! And provide figures for components imported and products made / sold , each year !
One only hopes that what Govt proposes to Apple is made “ public “ on DIPP web site so that there is ,
· No ambiguity ( no scope for arbitrariness / discretion )
-------------------------------------------------------------------------------------------
Dear Elon :
2018-19 :
Manufacture in your own factory , Li-ion Battery / Wall-mounted Powerpack Storages / Solar Roof Tiles
2020-21 :
2021-22 :
Now , it is very possible that neither Shri Gadkariji , nor Shri Goyalji , would be satisfied with such a slow PMP , spread out over a period of 5 years
With regards,
Hemen Parekh
www.HemenParekh.ai / 10 May 2024
Related Readings :
2017 ( 7 )
Will Tesla follow Apple ?............................ 23 May 2017
ENABLE ELON TO CATALYSE ! …………………………………….. 15 June 2017
Welcome ! Elon Musk ……………………………………………… 10 Feb 2017
From ELON to ION …………………………………………………………. 11 May 2017
Is it NOW or NEVER ? …………………………………………………….. 23 June 2017
Elon : Hesitation Can Hurt ! …………………………………………….03 July 2017
Elon : Widow Opens ( Door is not closed, either )…………. 07 July 2017
A Phased Manufacturing Program ? ……………………………. 23 Apr 2018
FAME II > FAME III > FAME IV …………………………………….. 05 Mar 2019
To beat OR not to beat ?........................... ………………. 29 Dec 2020
Fastest Finger First ? …………………………………………………….. 07 Oct 2020
ARA & M Ltd ? ……………………………………………………………….. 02 Oct 2020
Enough to entice Elon ? …………………………………………………. 03 Nov 2020
The Race is on ! …………………………………………… ………………… 23 Oct 2020
2021 ( 12 )
Import Duties : Time to get Rational …………………………. 27 July 2021
Hey Elon , What is so difficult ?........................... ……. 15 Aug 2021
Elon : It is a matter of GIVE and TAKE………………………….. 30 Aug 2021
Tesla Talking ?........................................................ 29 Aug 2021
Hey, Elon seems to have a case ! …………………………………. 27 July 2021
Can TESLA beat MATAM ? …………………………………………….. 24 July 2021
Cheaper in Gujarat ? – At least for Now ………………………. 23 June 2021
Nitin Gadkariji : Architect of NEAP………………………… …….. 07 Jan 2021
A Brief History of Electric Vehicles in India ………………….. 30 Jan 2021
Elon Musk : We offer a GREEN CARPET…………………………. 03 Mar 2021
Elementary, my dear Watson ! …………………………………….. 17 Jan 2021
At long last, TESLA is here ! …………………………………………… 13 Jan 2021
2022 ( 2 )
ELON , You have missed the Bus / by 5 YEARS ……………15 Feb 2022
Holding out an Olive branch ? No, entire Olive Tree !... 17 Feb 2022
A push for endless litigation ?...................... ……………..14 Nov 2023
Elon Musk, Welcome to Tesla’s Toughest Test……………… 17 May 2023
Additional Reading :
Ø 50 % DAV ? No problem .. …………………………… 16 Nov 2023
Extract :
# As per Shri Goyal , in 2023 , Tesla is likely to import parts from India , worth $
2 billion
# As per news reports, to begin with, Tesla plans to import / sell in India , fully
assembled EV priced ( in USA
# Let us assume $ 25,000 as FOB price , taking the CIF price to $ 30,000 ( with
freight / insurance added )
# Let us assume import duty ( proposed ) is 30 % on $ 30,000 = $ 9,000
# So , landed cost would come to $ 39,000
# Add to this “ distribution cost + dealer’s margin “ of 20 % ( ie . approx. $
8000 )
# Hence “ Net Selling Price “ would come to $ 47,000
# To this , add GST @ 5 % ( ie. $ 2350 ) – taking the final price to $ 49,350 , on
the road ( ignoring
# Let us assume that , in each of the first 2 years , Tesla sells 20,000 cars
# Hence its annual revenue would be > 20,000 x $ 50,000 ( rounded off ) = $
1,000,000,000 ( $ 1 Billion )
# Now , if Tesla purchases only $ 500 million worth of local components for its
India operations , from 2nd year
Addition ) of 50 % !
Tesla is already buying $ 1 Billion worth of Indian Components ( for its USA +
Germany+ China, operations )
Buying $ 500 milllion worth of components from Indian suppliers for its Indian
factory, would pose NO
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