Tesla's Withdrawal Pushes India to Broaden EV Incentives for Existing Factories

India is changing its EV policy to attract foreign car makers, including Toyota (TM, Financial) and Hyundai (HYMTF, Financial) , after Tesla (TSLA, Financial) decided not to assemble cars in India. New rules, to be implemented by March, extend taxation incentives for EV manufacturing at existing factories and for the production of vehicles built on a different line if they meet local content requirements.

Earlier, the incentives were meant for new manufacturers with at least $500 million in investment and 50 percent components for the state. However, further investments only in EV machinery at those plants will also count if minimum revenues from EVs have been reached. These changes are consistent with India's intention to increase the demand for electric vehicles and to attract additional local and international players into the country's emerging electric vehicle market.

India's venture corresponds with the efforts for green mobility and can make the country an attractive destination for EV manufacturing in Asia.

This article first appeared on GuruFocus.