Why Ola’s Bhavish Aggarwal ‘Strongly Disagrees’ With Elon Musk On EV Import Duty
The Hyundai Motor India MD also said that lower duties in India will help ‘grow the EV market’
Reacting to this, Ola CEO Aggarwal said, ‘Let’s have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import’
Any duty rate cut by the Centre on imported electric vehicles would be very beneficial as it would help automakers generate much-needed volumes and reach some viable scale, South Korean auto major Hyundai on Tuesday said.
Seon Seob Kim, Managing Director and CEO, Hyundai Motor India, backed Tesla’s call for lower duties in India on imported electric vehicles.
“We have heard that Tesla is seeking some duty cut on imports of CBUs. So that would be very helpful for the OEMs to reach some economy of scale in this very price competitive segment,” Kim said.
The Hyundai Motor India MD also said that lower duties in India will help “grow the EV market”. However, Bhavish Aggarwal, co-founder, Ola, seems to “strongly disagree” with this.
Reacting to the matter, Aggarwal said, “Let’s have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import.”
“We won’t be the first country to do so,” the Ola CEO added.
Aggarwal’s statement comes days after Tesla CEO Elon Musk said that India’s import duties on EVs are “highest in the world by far”.
“We want to do so, but import duties are the highest in the world by far of any large country,” Musk said in reply to a tweet about launching the company’s cars in India.
“But we are hopeful that there will be at least a temporary tariff relief for electric vehicles,” Musk added.
Strongly disagree with both. Let’s have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import. We won’t be the first country to do so!
Paytm CEO Vijay Shekhar Sharma responded to Aggarwal’s tweet saying, “Even though, I am waiting for a Tesla, I will love that we have everyone’s factories in India! More Make-in-India, more economic growth in India.”
Recently, ride-hailing app Ola said it had opened booking for its electric scooter.
“I am thrilled by the tremendous response from customers across India for our first electric vehicle. The unprecedented demand is a clear indicator of shifting consumer preferences to EVs. This is a huge step forward in our mission to transition the world to sustainable mobility,” Aggarwal said in a statement.
Ola claims the electric scooter would be class-leading in terms of speed, range, boot space as well as technology.
Tesla lobbies India for sharply lower import taxes on EVs
Tesla is likely to set up a factory in India if successful with imported vehicles, Chief Executive Elon Musk said on Twitter, after the company wrote to Indian ministries seeking a big reduction in import duties on electric vehicles, according to a Reuters report.
The electric-car maker’s pitch to lower duties, however, is likely to face resistance from Prime Minister Narendra Modi’s administration which has championed high import taxes for many industries in a bid to boost local manufacturing.
Tesla, which aims to begin sales in India this year, said in a letter to ministries and the country’s leading think-tank Niti Aayog that slashing federal taxes on imports of fully assembled electric cars to 40% would be more appropriate, according to the sources.
“The argument is that at 40% import duty, electric cars can become more affordable but the threshold is still high enough to compel companies to manufacture locally if demand picks up,” one of the sources said. The sources declined to be identified as the letter has not been made public.
The Indian market for premium EVs, indeed for electric cars in general, is still very much in its infancy with vehicles far too costly for the average consumer and very little charging infrastructure in place.
Just 5,000 of the 2.4 million cars sold in India last year were electric and most were priced below $28,000.
While lower duties would give Tesla a better chance to test the market, its plan to begin sales in India does not hinge 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 also scouting for showroom space.