India has encouraged Tesla to produce locally but Elon Musk wants India to lower taxes – in fact, as high as 100% on imported EVs — to enable the company to first sell vehicles built elsewhere at competitive prices. India will levy import duties of between 15-30% on parts shipped for assembly in the nation
India has dismissed Elon Musk-owned Tesla Inc’s demand for tax breaks to import electric cars. India has said that the present rules allow bringing in partially-built vehicles and assembling them locally at a lower tax. “We looked at whether the duties need to be re-jigged, but some domestic production is happening and some investments have come in with the current tariff structure. So, it is clear that this is not a hindrance,” Vivek Johri, Chairman of the Central Board of Indirect Taxes and Customs, said in an interview recently
India has encouraged Tesla to produce locally but Elon Musk wants India to lower taxes – in fact, as high as 100% on imported EVs — to enable the company to first sell vehicles built elsewhere at competitive prices. India will levy import duties of between 15-30% on parts shipped for assembly in the nation.
Incidentally, Tesla has yet to present a plan for local manufacturing and procurement from India, even after the government asked for it, Johri said. The recent Budget had no mention of tax breaks for cleaner imported vehicles. Meanwhile, Maharashtra has publicly backed Tesla’s demands. And, it is not alone. At least five Indian states have invited Tesla to set up shop after Musk said last month that Tesla was planning to import knocked-down units or partially built vehicles, which attract a lower import levy, instead of fully-built units.
Tesla wanted to enter India in 2019, but Elon Musk said that local rules prohibited him from importing since duties made Tesla cars “unaffordable.”
Tesla should follow the lead of domestic companies like Mahindra & Mahindra Ltd. and Tata Motors Ltd., which are investing in building local capacity for electric vehicles, Johri said. “There are others importing completely built units. That route is open,” he said.
Tesla has a big challenger in Mercedes-Benz, which will roll out a locally assembled EQS — the electric version of its flagship S-Class sedan — in India by the fourth quarter of this year. Indian roads are still dominated by cheap, petrol and diesel-powered cars with electric vehicles accounting for less than 1% of total sales.
Tesla wanted to enter India in 2019, but Elon Musk said that local rules prohibited him from importing since duties made Tesla cars “unaffordable.”
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