New Delhi: Tesla Inc. Two sources with knowledge of the matter said they have written to Indian ministries seeking a major reduction in import duty on electric vehicles (EVs), a move that will boost demand and generate revenue for the government.
However, its pitch may face resistance from the Prime Minister Narendra Modiadministration of which has favored higher import taxes for many industries to promote local manufacturing.
Other luxury automakers in India have also lobbied the government in the past to lower taxes on imported cars, but with little success due to rivalries with domestic operations.
Tesla, which aims to start sales in India this year, said in a letter to ministries and the country’s leading think-tank Niti Aayog According to sources, it would be more appropriate to reduce government taxes on imports of fully assembled electric cars to 40%.
This compares with current rates of 60% for cars under $40,000 and 100% for those above $40,000.
One of the sources said, “The argument is that at 40% import duty, electric cars may be more affordable, but the limit is still high enough to force companies to manufacture locally when demand increases. ” The sources declined to be identified as the letter has not been made public.
According to Tesla’s US website, only one model — the Model 3 Standard Range Plus — costs less than $40,000.
Tesla and NITI Aayog did not respond to emails seeking comment. ministry which Tesla Wrote to include the Ministries of Transport and Heavy Industry, which did not immediately respond to a request for comment.
The Indian market for premium EVs, in fact for electric cars in general, is still in its infancy, with vehicles too expensive for the average consumer and very little charging infrastructure in place.
Of the 2.4 million cars sold in India last year, just 5,000 were electric and most cost less than $28,000.
Daimler’s mercedes benz It started selling its EQC luxury EV in India last year for $136,000, and Audi this week launched three electric SUVs with sticker tags that start at around $133,000.
While the lower tariffs will give Tesla a better chance to test the market, its plan to start sales in India is not dependent on a change in government policy, both sources said.
Tesla registered a local company in India in January and has ramped up local hiring while looking for showroom space.
transport minister Nitin Gadkari Told Reuters In March that India would be willing to offer incentives to ensure that Tesla’s production costs in the country are lower than in China, but only if it manufactures locally.
However, its pitch may face resistance from the Prime Minister Narendra Modiadministration of which has favored higher import taxes for many industries to promote local manufacturing.
Other luxury automakers in India have also lobbied the government in the past to lower taxes on imported cars, but with little success due to rivalries with domestic operations.
Tesla, which aims to start sales in India this year, said in a letter to ministries and the country’s leading think-tank Niti Aayog According to sources, it would be more appropriate to reduce government taxes on imports of fully assembled electric cars to 40%.
This compares with current rates of 60% for cars under $40,000 and 100% for those above $40,000.
One of the sources said, “The argument is that at 40% import duty, electric cars may be more affordable, but the limit is still high enough to force companies to manufacture locally when demand increases. ” The sources declined to be identified as the letter has not been made public.
According to Tesla’s US website, only one model — the Model 3 Standard Range Plus — costs less than $40,000.
Tesla and NITI Aayog did not respond to emails seeking comment. ministry which Tesla Wrote to include the Ministries of Transport and Heavy Industry, which did not immediately respond to a request for comment.
The Indian market for premium EVs, in fact for electric cars in general, is still in its infancy, with vehicles too expensive for the average consumer and very little charging infrastructure in place.
Of the 2.4 million cars sold in India last year, just 5,000 were electric and most cost less than $28,000.
Daimler’s mercedes benz It started selling its EQC luxury EV in India last year for $136,000, and Audi this week launched three electric SUVs with sticker tags that start at around $133,000.
While the lower tariffs will give Tesla a better chance to test the market, its plan to start sales in India is not dependent on a change in government policy, both sources said.
Tesla registered a local company in India in January and has ramped up local hiring while looking for showroom space.
transport minister Nitin Gadkari Told Reuters In March that India would be willing to offer incentives to ensure that Tesla’s production costs in the country are lower than in China, but only if it manufactures locally.
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