Will Tesla Ever Make It To India?

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With a rising number of EVs entering the Indian market, the wait for Tesla feels longer and longer. The brand is an icon in the electric vehicle industry and the announcement of its launch in India had sparked the enthusiasm of all buyers. We have spied the Tesla test mules running on our roads, but the actual cars are yet to arrive. In the early stages of setting up a contract between our government and Tesla, the brand had asked for a reduction in import tariffs. This had led to a stalemate and the current situation does not stand much far from it.

Official Statement

While replying to a tweet that asked about the update on Tesla’s launch in India, Elon Musk, CEO of Tesla Motors, said, “Still working through a lot of challenges with the government,”. After this tweet, this tussle between the two parties has now expanded into a Twitter battle, and users have broken into two factions; Pro Tesla and Pro Indian Government.

What’s Happening?

It all boils to one thing and that is production. As of now, Tesla wants to import their cars to India from China and not manufacture them on our soil. To facilitate this, the brand has asked the government to provide relaxation in import taxes. India imposes 100 percent duty on import of fully imported cars with a CIF value of over $40,000, and 60 percent duty on cars with a CIF of less than $40,000. In addition to this, the government also levies a Social Welfare Surcharge of 10 percent. Tesla has requested our government to agree on a 40 percent tariff on all-electric vehicles irrespective of their CIF and completely strip off the Social Welfare Surcharge.

The EV major has said that it is willing to make several investments in our country in the name of sales, services, and charging infrastructure. Our government, on the other hand, has been asking Tesla to manufacture their cars in India. For this, the government is willing to provide all the necessary support (in terms of tax benefits) to the company. They believe that manufacturing in India will open up job opportunities and will also be beneficial for Tesla in its exports. The Indian EV industry is still in its infancy and the establishment of a manufacturing plant by Tesla could prove extremely fruitful in the long run. Niti Aayog’s Vice President, Rajiv Kumar said, “Come and manufacture in India, you (Tesla) will get all the tax benefits you want.”

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