We all are eagerly waiting for Tesla’s entry in India. Numerous test mules of the model 3 have been spotted too which indicates that it’s not too long before we could see them on the road. However, the launch of Tesla in India is getting delayed due to various challenges posed by our market. One of the main challenges faced by Tesla is the high import duty which would prevent Tesla from pricing their cars competitively.
How cheap could EVs get?
For imported electric vehicles (EVs) with a value of less than $40,000 – including the car’s cost, insurance and freight – the government is discussing slashing the tax rate to 40% from the current 60%. For cars with value above $40,000, it is looking at cutting the rate to 60% from 100%. “We haven’t firmed up the reduction in duties yet, but there are discussions that are ongoing,” one of the officials said. Tesla, in its pitch to the government, argued that lowering import duties on EVs to 40% would make them more affordable and boost sales. The government is in favour of a tax cut if companies such as Tesla can set up local manufacturing and provide benefits to locals by creating jobs.
Recently, Elon Musk went on to twitter to explain the launch delay stating, “We want to do so, but import duties are the highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which doesn’t seem entirely consistent with the climate goals of India.” Tesla announced its entry in India earlier this year in January. The EV maker registered as Tesla India Motors in Karnataka, months after its CEO Elon Musk had hinted at Tesla’s entry into the country. The company recently added Hindi as one of the languages on its infotainment UI recently. Later, Union Minister Nitin Gadkari also said Tesla is set to start its operations in India by this year and may set up a manufacturing unit as well. Tesla is yet to set up its own manufacturing facility in India, the first of its electric vehicles for the Indian customers are likely to be imported.