Once upon a time, there was a motorcycle known as the Yamaha RX100. It had a remarkable feat of accelerating from zero to 60 kmph in approximately six seconds, ruling the hearts of a generation used to the rough charm of Yezdis and the imposing presence of Bullets.
Yamaha’s offering stood out distinctly, living up to its tagline: “Ahead of the 100s.”
While its competitors managed to survive in various forms, the Yamaha RX100 met an untimely demise. The icon of an era faltered in meeting new emission standards, fading into history before the dawn of the new millennium.
The RX100’s demise marked a footnote in India’s quest for cleaner air. The Government of India’s decision on Friday to reduce import duty on EVs to 15 percent under specific conditions may trigger a few more footnotes in the Indian automotive industry.
In a landmark move, the Indian government announced a reduction in import duty to 15 percent under specific conditions: a minimum investment of Rs 4150 Cr, a three-year timeline for establishing manufacturing facilities in India, and commencing EV production with 50 percent domestic value addition within five years. In return, companies gain the privilege of importing 8,000 EVs annually at the reduced tax rate for vehicles priced at $35,000 and above, compared to the previous rates of 70 percent or 100 percent.
While some view this decision as favoring international giants like Tesla and VINFAST over local manufacturers, the reality reflects the stagnant progress of traditional ICE manufacturers since the declaration by the Minister of Road Transport and Highways, Shri Nitin Gadkari, in 2017, emphasizing the shift towards alternative fuels.
“We should move towards alternative fuel… I am going to do this, whether you like it or not. And I am not going to ask you. I will bulldoze it,” Mr Gadkari had said then.
This policy, however, is not without its potential drawbacks. The policy’s focus on 50 percent domestic value addition within a short time frame might incentivize companies to simply assemble imported components rather than invest in full-fledged local manufacturing; and lower import duty may initially favor imported EVs, potentially slowing down the initial growth of domestic EV production. Without doubt though, the policy shall shape up the electric vehicle narrative in the country.
The question remains: how will traditional manufacturers respond? Only time will tell if they can rise to the electric challenge.
History is littered with examples of vehicles that couldn’t adapt – the Yamaha RX100, the TVS Shogun, and the Maruti Suzuki Gypsy all bowed out due to emission norms. As we transition to a greener future, the stakes are higher. This time, obsolescence could spell doom not just for individual models, but for the brands that fail to adapt.
Amrit Raj is a former journalist, an award winning author for his book ‘Indian Icon – A cult called Royal Enfield’, and head of marketing at Zetwerk. Views expressed are personal.