The new EV policy sought to promote India as a manufacturing destination for EVs and attract investment from reputed global manufacturers
Tata Motors' British arm, Jaguar Land Rover, said it has no plans to take advantage of India's new electric vehicle policy, which provides import duty concessions to firms that set up manufacturing units in the country, because it is not appropriate for the company.
The government unveiled a new electric vehicle policy in March of this year in an effort to draw in big international players like Tesla. The policy will allow them to import a restricted quantity of cars at a reduced customs/import duty of 15 percent on vehicles costing $35,000 and above for a period of five years from the date the government issues the approval letter.
Tata Motors Group CFO PB Balaji stated during the earnings conference, "At this point in time, that specific policy is not something that is suitable for us. So, we do not intend to leverage it at this point in time."
He was responding to a question about whether Jaguar Land Rover (JLR) intends to take advantage of India's new EV policy with an eye towards future mass production of electric vehicles in the country.
Balaji stated that JLR's business in India is "on a very good wicket, growing very strongly."
"We have just localised the manufacturing of Range Rover and Range Rover Sport, and we are seeing huge pickups in order in that front. As volumes pick up, we would like to keep localising to the extent possible, and if the policy environment we are able to leverage upon, we will definitely consider it," he added.
At the same time, he stated, "We will continue to look at opportunities for CKD (completely knocked down) manufacturing to ensure that we take the same benefits of 15 percent customs duty without taking on additional obligations in terms of both localisation and bank guarantees. As a result, we continue to evaluate CKD operations as more attractive to us, given our size and scale in India at this point."
The new EV policy sought to promote India as a manufacturing destination for EVs and attract investment from reputed global manufacturers.
Under the policy, the approved applicants will have to set up manufacturing facilities in India with a minimum investment of Rs 4,150 crore ($500 million) for the manufacturing of e-4W (electric four-wheelers) and provide a bank guarantee.
The manufacturing facilities will have to be made operational within a period of 3 years from the date of the issuance of the approval letter by the Ministry of Heavy Industries, achieve a minimum DVA (domestic value addition) of 25 percent within the same period, and increase it to 50 percent in five years.
According to the policy, the companies will be allowed to import CBUs of e-4W manufactured by them at a reduced customs duty of 15 percent, subject to the conditions. The maximum number of e-4W allowed to be imported at the reduced duty rate will be capped at 8,000 per year. The carryover of unutilised annual import limits would be permitted.
Earlier in the day, announcing the June quarterly earnings, Tata Motors said its British luxury car arm is likely to witness constrained production in the second and third quarter of the current fiscal, reflecting the annual summer plant shutdown and floods at a key aluminium supplier.
"As we work towards mitigation and recovery, we will hold our guidance on our key full-year financial deliverables of more than 8.5 percent EBIT and achieving net cash," it said.
The wholesale volumes for JLR during the quarter were up 5 percent year-on-year at 98,000 thousand units, while retail sales in the April-June period grew 9 percent year-on-year to 1.11 lakh units, according to the company.