NEW DELHI: Negotiations on potential tax benefits between India and Tesla stalemate as the government is unwilling to give the company any breaks without a commitment to manufacture locally, people familiar with the discussions told Reuters.
Tesla is desperate to import and sell its electric vehicles in India and has lobbied officials in New Delhi to lower tariffs for almost a year now, the company’s billionaire CEO says. Elon Musk It is said that there are most in the world.
But official sources in India said they are unconvinced of Tesla’s lobbying as the company has yet to share any concrete plans to invest in the country, something that is in line with Prime Minister Narendra Modi’s “Make in India” initiative to boost local manufacturing. in India” approach. and create jobs.
A third person with direct knowledge of Tesla’s thinking said talks with the government had reached a “strange standoff.”
“Things are not progressing (for Tesla),” the person said.
The sources declined to be identified as the discussions were private.
The apparent impasse could upset the electric carmaker’s ambitions for the South Asian country as it was hoping at lower import taxes to make its cars more affordable and business viable.
Currently, India imposes an import tax as high as 100% on electric vehicles, which have so-called landing costs – the cost of a car plus inbound shipping charges – of $40,000 or more.
This would make India the most expensive market for Tesla cars in the world, making them out of reach for most Indian consumers.
A third source said Tesla has told officials it is open to sourcing more auto components locally and eventually moving to manufacturing, but government sources have indicated they want a firmer commitment.
“If they don’t want to invest anything here, how will that model work,” said a senior government official.
Tesla did not respond to a request for comment.
The finance ministry and the commerce and industry ministries, all of which are reviewing Tesla’s demands, did not respond to a request for comment.
hardcore point of view
However, Tesla has pinned its hopes on the upcoming Budget on February 1 – when such tax changes are usually announced – to see if lobbying yields any results, or to reconsider how it wants to reach the Indian market, third sources and A fourth person aware of the company’s plans said.
In its latest push, Tesla recently met with tax and customs officials, a fourth source said. It previously met with Modi’s office and sought Musk’s meeting with the prime minister to discuss his plans for India.
The government has in the past taken a tough stand against demands from foreign companies as it focused on promoting local production.
In 2017, Apple sought tax concessions, including lower import duties, to make iPhones locally, but many of its demands were rejected by Modi’s officials.
Musk had earlier said on Twitter that if Tesla is successful in selling imported cars, it may consider manufacturing cars in India. He tweeted last week that the company “still faces a lot of challenges with the government.”
Tesla is desperate to import and sell its electric vehicles in India and has lobbied officials in New Delhi to lower tariffs for almost a year now, the company’s billionaire CEO says. Elon Musk It is said that there are most in the world.
But official sources in India said they are unconvinced of Tesla’s lobbying as the company has yet to share any concrete plans to invest in the country, something that is in line with Prime Minister Narendra Modi’s “Make in India” initiative to boost local manufacturing. in India” approach. and create jobs.
A third person with direct knowledge of Tesla’s thinking said talks with the government had reached a “strange standoff.”
“Things are not progressing (for Tesla),” the person said.
The sources declined to be identified as the discussions were private.
The apparent impasse could upset the electric carmaker’s ambitions for the South Asian country as it was hoping at lower import taxes to make its cars more affordable and business viable.
Currently, India imposes an import tax as high as 100% on electric vehicles, which have so-called landing costs – the cost of a car plus inbound shipping charges – of $40,000 or more.
This would make India the most expensive market for Tesla cars in the world, making them out of reach for most Indian consumers.
A third source said Tesla has told officials it is open to sourcing more auto components locally and eventually moving to manufacturing, but government sources have indicated they want a firmer commitment.
“If they don’t want to invest anything here, how will that model work,” said a senior government official.
Tesla did not respond to a request for comment.
The finance ministry and the commerce and industry ministries, all of which are reviewing Tesla’s demands, did not respond to a request for comment.
hardcore point of view
However, Tesla has pinned its hopes on the upcoming Budget on February 1 – when such tax changes are usually announced – to see if lobbying yields any results, or to reconsider how it wants to reach the Indian market, third sources and A fourth person aware of the company’s plans said.
In its latest push, Tesla recently met with tax and customs officials, a fourth source said. It previously met with Modi’s office and sought Musk’s meeting with the prime minister to discuss his plans for India.
The government has in the past taken a tough stand against demands from foreign companies as it focused on promoting local production.
In 2017, Apple sought tax concessions, including lower import duties, to make iPhones locally, but many of its demands were rejected by Modi’s officials.
Musk had earlier said on Twitter that if Tesla is successful in selling imported cars, it may consider manufacturing cars in India. He tweeted last week that the company “still faces a lot of challenges with the government.”
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