India's EV Manufacturing Incentive Plan Stalls as No Automakers Apply

India's "Scheme for Promotion of Manufacturing of Electric Vehicles and Components" (SPMEPC), launched by the government last year, has stalled. According to officials, not a single automaker has submitted an application to avail of the import duty concessions, and the online application portal has already been shut down. The scheme required companies to invest at least ₹415 billion in establishing manufacturing facilities and achieve 50% localisation within five years. However, high entry barriers and policy uncertainty have deterred automakers from participating. Although international brands like Tesla had initially expressed interest, none ultimately joined the program, opting instead to import fully built vehicles. Additional factors further dampening investment appetite include the exclusion of land acquisition costs from total eligible investment, penalties for failing to meet localisation targets, and the potential reduction of import tariffs under a future India-EU free trade agreement. Despite these challenges, electric passenger vehicle sales in India reached 270,000 units in 2025, an 86% year-on-year increase. Nevertheless, market penetration remains low at just 4%, leaving a significant gap to the government’s 2030 target of 30%.