Big Blow to Tesla As Govt Has No Plans to Cut Import Duties on Electric Vehicles

Tesla’s plan to sell electric vehicles in India may face further delay over high import duties. Here is all you need to know.

The government said it has no plans to cut import duties on electric vehicles after US-based electric carmaker Tesla made an appeal to authorities to slash taxes. It is a blow to Tesla plans to start selling its imported electric vehicles in India.

The price of Tesla’s electric vehicles are already high and import duty of 60-100 per cent will take them beyond the reach of most customers in the country.

Earlier, it was reported that the government was considering a plan to lower import duty on Tesla’s electric vehicles if it plans to start local manufacturing.

However, junior minister Krishan Pal Gurjar told Parliament on Monday that there is no proposal under consideration in the Ministry of Heavy Industries. He was referring to the ministry in charge of making policies for the auto industry.

Gurjar also informed that the government is taking steps to promote the use of electric cars by lowering domestic taxes and adding charging stations.

While the government has introduced several measures to promote local manufacturing and use of electric vehicles, it is unlikely that any special provision will be made for Tesla, which plans to initially start selling wholly-built units of its EVs. Musk has already floated the possibility of a local factory once it starts selling the imported vehicles.

BIG PRICE CHALLENGE FOR TESLA

Last month, Tesla had written to the transport and industry ministries, requesting them to cut import duty on electric vehicles to 40 per cent from the current range of 60 per cent to 100 per cent.

The current rate applicable is 60 per cent for electric vehicles prices below $40,000 and 100 per cent for anything above.

Tesla was expected to start selling its vehicles in India by early 2021, but the plans have been delayed due to the high import duty hurdle. While Musk remains eager to tap the Indian market, the price of its vehicle coupled with high import duty will be a big blow to actual market sales, given the low demand for EVs.

Even Musk knows that the high import duty on wholly-built units will make Tesla cars “unaffordable” in the country.

Source: indiatoday