What Is The Main Crux Of The EV Policy? Axis Securities Analysis

Axis Securities Report

The crux of the electric vehicle policy lies in its strategic initiative to entice global original equipment manufacturers to establish local production facilities for electric vehicles, requiring a substantial investment of at least $500 million.

The policy entails a reduction in custom duty to 15% (earlier 60%-100%) on import of completely built units with a minimum value of $35,000, subject to certain conditions.

Notably, this incentive is capped at 8,000 units annually and necessitates a gradual increase in local manufacturing, reaching 25% domestic value addition by the third year and 50% by the fifth year.

Furthermore, the policy introduces stringent bank guarantee requirements to offset the foregone import duty, ensuring accountability and safeguarding against tax revenue loss.

Stocks which could see positive reaction from the announcement are: Sansera Engineering Ltd., Uno Minda Ltd. and Minda Corporation Ltd.

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