Tesla has been working with officials in India to lower import taxes on electric vehicles, which CEO Elon Musk has called the “highest in the world by far.”
Those discussions have gone nowhere, recently reaching an impasse where neither party wanted to budge on their positions.
In the latest update, Indian officials have again rejected Tesla’s proposed tax breaks to import their cars into the country.
Government officials said rules already allow for partially-built vehicles to be brought in and then assembled locally. This results in a lower import duty, a scheme which has already yielded results from other automakers.
The Central Board of Indirect Taxes and Customs Chairman noted that “some domestic production is happening, and some investments have come in with the current tariff structure”.
He also noted, “it is clear that this is not a hindrance”.
The government asked Tesla to provide a local manufacturing and procurement plan in India. However, Tesla has yet to give the government that document, according to a report by NDTV.
Tesla has been working on bringing its vehicles to India since 2019. However, the Indian government is not backing down. Thus, Tesla is facing three different options.
- Do nothing and maintain the status quo
- Work with Indian authorities to either import knocked-down units or build an assembly plant in India
- Wait and see if officials will change their mind on lowering import duties
Under the current plan India levies an import duty of 60% on electric vehicles that cost $40,000 or less, and 100%t for those priced above $40,000.