Tata Motors' Jaguar Land Rover won't use India's new EV policy

JLR on new EV policy: Tata Motors has announced that its British subsidiary, Jaguar Land Rover (JLR), will not be utilising India's newly introduced electric vehicle (EV) policy at this time. The policy was unveiled in March and is designed to attract major global auto manufacturers by offering import duty concessions on electric vehicles, but JLR finds it currently unsuitable for its operations.

The policy provides a reduced import duty of 15 per cent for vehicles priced above $35,000, applicable for five years. It aims to encourage foreign companies to establish manufacturing facilities in India. However, PB Balaji, Tata Motors Group CFO has stated at the company's earnings conference that JLR has no plans to take advantage of this policy soon.

Balaji has explained that while JLR's business in India is performing well, including the successful localisation of Range Rover and Range Rover Sport production, the current policy framework does not align with the company's strategy. He had emphasised that JLR's focus remains on enhancing local manufacturing capabilities and evaluating opportunities for completely knocked down (CKD) assembly, which allows for similar benefits without additional localisation requirements or bank guarantees.

Under the new policy, companies are required to invest a minimum of Rs 4,150 crore ($500 million) in manufacturing electric four-wheelers in India and meet specific domestic value-addition targets. Companies can import up to 8,000 electric vehicles annually at the reduced duty rate, with unutilised import limits allowed to be carried over.

In addition to discussing the policy, Tata Motors has reported a likely production constraint for JLR in the coming quarters due to annual plant shutdowns and due to disruptions in the supply chain. Despite these challenges, the company maintained its financial guidance, aiming for an EBIT margin of over 8.5 percent and a positive net cash position.

For the quarter ending June, JLR's wholesale volumes increased by 5 per cent year-on-year to 98,000 units, with retail sales rising by 9 per cent to 111,000 units.