Tesla wants concessions so that it can import its cars into India and make them relatively viable.
see photosElon Musk has been vocal about India’s tax laws
The Indian government has rejected any special concessions and tax breaks for Tesla, the world’s most valuable carmaker and electric car pioneer. In a report by ETAuto, it is learned that the government’s plans for local manufacturing have received an overwhelming response which could generate revenue of over Rs 2.3 lakh crore. Heavy Industries Secretary Arun Goyal has revealed that companies that have submitted proposals for localization have invested in India which is beyond the government’s estimates.
Goyal said, “We have received fresh investment proposals of over Rs 42,500 crore targeted. The response has been overwhelming and the large industry has appreciated our plan, which explains the strong investment commitment.”
But when asked about possible concessions to facilitate Tesla’s entry in India, he ruled out the possibility. “The concession scheme (for industry) is the same. We are a democracy,” he said.
Tesla recently requested the Indian government for a tax break to reduce the cost of selling its CBU vehicles in the country.
Transport Minister Nitin Gadkari had also expressed concern about Tesla’s proposed entry into India, where it would start selling imported vehicles made at its Shanghai Gigafactory.
“The company (Tesla) wants market workers from China and India. It is not possible under the Modi government. Our government policy is that if the Indian market is to be used, then job opportunities have to be given to Indians too,” said Heavy Minister of State for Industry Krishna Pal Gurjar said in the Lok Sabha opposing Tesla’s plan to enter India.
Tesla’s plight in India is a tricky one – it wants to take advantage of what would be the world’s third-largest automobile market, but its products aren’t viable for the market. Its cheapest model is significantly more expensive than the cost of the average sedan, which in turn is associated with a potential 100 percent tax charge. Then there’s the lack of local charging infrastructure that has been Tesla’s secret sauce.
India does not want to give tax exemption to Tesla for several reasons. It has already secured investments from automotive giants like Hyundai and Mercedes who are making their top-end EVs in India. If exceptions were made for Tesla, it would have to extend the tax break to every carmaker.
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Then there is the possibility of Tesla importing its cars from China, a country with which India’s ties have been strained. On top of this, Prime Minister Narendra Modi’s government champions localized manufacturing with its “Make in India” plan, so Tesla’s plans go against the Indian government’s wishes.
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