Tesla wrote to multiple Indian Ministries seeking a significant reduction in import duties on EVs. According to Tesla, the move would boost demand and generate revenue for the government.
However, the pitch may face significant opposition from the Prime Minister’s Administration as they hope to boost local manufacturing. The Administration championed these high import taxes and wants to ensure made in India vehicles have an advantage.
Following the communication, CEO Elon Musk took to Twitter to say India’s import duties are the highest in the world, and that even a temporary tariff relief would help them enter the market.
But we are hopeful that there will be at least a temporary tariff relief for electric vehicles. That would be much appreciated.
— Elon Musk (@elonmusk) July 23, 2021
He later added that if that happens, the chances of his company building a factory in India are “quite likely.”
If Tesla is able to succeed with imported vehicles, then a factory in India is quite likely.
— Elon Musk (@elonmusk) July 23, 2021
This is not the first time an automaker has pitched the Indian government on lowering import taxes. However, no one has yet to be successful due to opposition from domestic operators.
Tesla is planning to start sales in 2021, but the current import tax of 60% for cars below $40,000 and 100% for vehicles over $40,000 is steep. Tesla hopes to sell a change to a flat 40% import tax for fully assembled EVs to the Indian government.
Whether the change happens or not, Tesla has begun preparations to enter the Indian market at some point in the future. The automaker registered a local company in India back in January and is hunting for showroom space in Mumbai.
