In response to Tesla launch reports, India may lower import duties
Even though Tesla intends to establish a formal business presence in India, nothing has been confirmed as of yet. In spite of Tesla’s requests for a lowered import duty in order to begin selling its electric cars in the country by import, the Indian government has stated that the duty will not be reduced. In addition, the government is demanding that the EV manufacturer establish a manufacturing facility and manufacture its electric vehicles in the country before selling them. Tesla’s India business ambitions have been slowed down because of this, but the Indian government is reportedly considering reducing its import tariffs for electric vehicles in order to lure the Elon Musk-led company to India.
Tesla recently requested that the Indian government lower import duties for electric vehicles to 15%, in order to expedite the company’s entry into the Indian market. It has been reported in the Financial Times that Elon Musk’s company is exploring the possibility of building a plant in India. This may encourage the automaker to move forward with the project more quickly.
The announcement follows the revelation that Tesla is planning to build its most affordable electric car to date at its plant in Germany. At first, the most affordable Tesla EV that Tesla has ever produced was thought to be built in India. It appears that the electric vehicle manufacturer has changed its mind and is now planning to build the car in Germany instead of the US. It is expected that this will be Tesla’s most affordable car ever when it launches. A cheaper derivative of the Tesla Model 3 sedan is expected to be offered at around $27,000 and will be based on its basic design.
The company wants the Indian government to provide Tesla with an initial import tariff concession so it can ditch the country’s high customs duties of 70 percent on cars worth less than $40,000 and 100 percent on cars worth more than $40,000.
A government official quoted in the news report said Tesla’s view has always been that tariff concessions are needed at least during the interim period as a prerequisite to building a plant in India. In spite of this, the Indian government initially stated that no such concessions would be offered to Tesla. It is important to note that the latest development would benefit not only Tesla but also all automakers that import electric vehicles into India through the CBU route. Apparently, the official stated, “We want to create a package that is beneficial to India and that does not become a curated package that benefits only one company. Other companies can take advantage of this window, subject to meeting these types of requirements.”
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