Tesla must start production in India before expecting any import tax concessions

Updated on Sep 13, 2021 03:56 AM IST  |  42.8K
Tesla must start production in India before expecting any import tax concessions

Elon Musk’s Tesla has hit a major roadblock in India before launching its electric cars in India. Earlier this year, the company sent a letter to the ministries and the think-tank Niti Aayog to reduce the import duties for electric vehicles to India. Following this, a report last month suggested that the Indian government is re-evaluating its plans to consider reducing import tax duties for Tesla in the country.  Given the company boosts procurement of components from India. However, a new report by PTI suggests that the government is not considering reducing import tax duties for Tesla in the country.

The government has denied giving any relief to Tesla for import tax duties

 According to the report by the Press Trust of India, the heavy industries ministry has asked Elon Musk’s Tesla to first start production in India to get any import tax reliefs. The news comes as a shocker to Tesla, which had sought to reduce import duties on electric vehicles in the country to 40 percent from the current 60 to 100 percent rule. As of now, there’s an import tax of 100 percent on all EVs priced above $40,000 and 60 percent for cars that cost less.

If the report is to be believed, Tesla has to essentially set up manufacturing plants in India and build its car here as part of the “Make in India” program. Notably, the sources of the PTI report said “the government is not giving such concessions to any auto firm and giving duty benefits to Tesla will not send a good signal to other companies that have invested billions of dollars in India.”

Tesla plans to open fully-owned retail showrooms in India

In related news, a recent report suggested that Tesla is reportedly in talks with the Centre on regulations to open its EV retail showrooms in the country. The company wants to set up fully-owned retail outlets in India. To do this, the company has to comply with the foreign direct investment (FDI) regulations related to single-brand retail.

Looks like Elon Musk’s plans to launch Tesla cars in India are getting hit by multiple roadblocks at the moment. In the meantime, the company is already testing its multiple car models including the Model 3 and Model Y in the country. 

How many cars Tesla currently sells?
Tesla commenced its operations in 2008 and started manufacturing its first car called the Roadster the same year. Now, the brand is offering the Tesla Model S, Model X, Model Y, and Model 3 on sale at the moment.

Which is the most affordable Tesla car at the moment?
The Tesla Model 3 model is the most affordable electric vehicle from the brand at the moment. The standard variant of the EV costs $39,990, while the long-range and performance models are priced at $48,990 and $56,990 respectively.

When is Tesla launching in India?
Tesla is expected to launch its first car in India in the coming months, possibly in the first half of 2022. The brand has already setup its first office in the country in Bengaluru.