Why in News? Within a week of postponing his visit to India, Tesla CEO Elon Musk landed in Beijing to push for Full Self-Driving (FSD) cars.

What makes China more Important?

• China’s Dominance in Battery Production- China accounts for over half of global electric vehicle (EV) sales, largely driven by its dominance in battery production- a critical element for EV manufacturing.
• Tesla’s Biggest Plant in Shanghai- was opened in 2018 after a new Chinese policy allowed foreign carmakers to establish fully-owned subsidiaries. It is important as it supplies cars to New Zealand, Australia, and Europe.
• India’s EV Push Still at Nascent Stage- India has historically relied on imports of batteries from elsewhere, and has a fragmented EV supply chain, but is pushing for battery production through production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage- a crucial component of lithium-ion batteries. As per Niti Aayog, India could represent up to 13% of global battery demand by 2030.
• Regulatory Flip-flops on India’s EV Policy- In 2018, then Niti Aayog CEO denied the need of an EV policy. In 2018-19, Centre increased customs duty on CKD (completely knocked down) imports of motor vehicles, motor cars, motorcycles from 10% to 15%. It was eased last month (with India's EV policy launch)with a minimum investment limit for manufacturers at Rs 4,150 crore.

Is There Still an Opportunity for India? Yes, as China’s exports are increasingly coming under scrutiny in Europe and the US. European Commission last year launched an anti-subsidy investigation into battery electric vehicles (BEV) imports from China to determine whether BEV value chains in China benefit from illegal subsidization and causes economic injury to EUs EV manufacturers. The US also considers Chinese EVs as a threat to its carmakers.