Why India's import duty incentives for EVs do not impress Renault-Nissan
Renault group CEO Luca de Meo said India’s recent EV policy may not work for the company, while his Nissan counterpart Makoto Uchida still had questions over localisation and growth.
The Renault-Nissan alliance is uncertain about building electric cars for the Indian market. Even as individual brands, both companies—France-headquartered Renault and Japan-based Nissan—are non-committal about importing electric vehicles, despite the much-touted import duty cut in India's EV policy.
"We have just seen the structure of the new regulations, but I'm not deep enough (into it) to evaluate the competitiveness of the proposal made by the government," said Luca de Meo, CEO of the Renault Group, in a joint media briefing with his Nissan counterpart, Makoto Uchida, in Chennai.
One of the key tenets of the new EV policy is a reduced import duty of 15% on EVs imported as a completely built unit, from the present-day 70% to 100%. However, the beneficiary of the provision, the policy states, will have to set up a commercial manufacturing unit within three years and invest a minimum of $500 million (approximately ₹4,150 crore).
The Renault and Nissan CEOs were responding to a CNBC-TV18 question over whether they would participate in the policy.
"I cannot say if that will work for us because I haven't done the math and haven't made the business case," said Luca. "But the reality is that every OEM (original equipment manufacturer) in the world is investing tonnes of money and resources and they are trying hard to cope with various regions' expectations on the energy transition front."
He added, "So, there is a traffic jam worldwide, and I think India is in the traffic. For us, who make decisions and run projects, it's a question of trade-off on limited resources and assessing what to do first."
While the Renault CEO admitted to being "eager" to engage with EV stakeholders to work out a strategy pertaining to EVs, business needs would take priority: "We need to give the customers what they want and what they can afford."
While Nissan CEO Makoto Uchida said the company was discussing building EVs for India, he cited continuing questions over localisation and market growth. "We need to understand how localisation can be secured, and we always tend to think of how we can come and grow in this market," he said. "We are in discussions over how we can make sure our electric cars will be considered in this market."
The Renault-Nissan alliance, which was forged in 1999, has completed 25 years. Both CEOs, accompanied by Jean-Dominique Senard, Chairman of the Renault-Nissan alliance, visited the company's plant in Chennai. The leadership announced the launch of four new SUV product offerings—two for Renault and two for Nissan—to be made on the alliance's common platform and unveiled in the next few years. Both Renault and Nissan are expected to simultaneously launch a 5-seater SUV and a 7-seater SUV, each.
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