Volkswagen teams up with Tesla over EV import duties in India

Volkswagen has teamed up with rival Tesla to put pressure on the Indian government to slash import duties on electric vehicles (EVs). The companies note that the current import duties make it difficult to enter the market.

Currently, India charges a 60% import tax on vehicles costing $40,000 or less. While for vehicles over $40,000, the import tax is 100%. The country set up this import tax to boost local manufacturing, but automakers see it differently.

In the last few months, Tesla has publicly campaigned against these aggressive duties. In fact, the import duty is currently holding up the auto manufacturer from selling into the Indian market.

Yesterday, Volkswagen joined the fight and proposed a reduction of the import duties to 25%. VW reasons that the duty will still make international vehicles more expensive than local options but would eliminate an unnecessary barrier to EV’s.

Other vehicle manufacturers, including Mercedes-Benz and Hyundai, voiced support for cuts to the import duties, reports Reuters. Officials in India did not comment on Volkswagen’s proposal.

The opposition to the high import duties appears to be working. After initially saying there was no chance the government would reduce them, officials last week said they are considering slashing them by up to 40%.

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