Sources said Tesla has also separately requested a meeting between its chief executive Elon Musk and PM Modi.
Tesla Inc. has urged Indian Prime Minister Narendra Modi’s office to reduce import tax on electric vehicles before entering the market, four sources said. Reuters, meeting the demands facing objections from some Indian automakers.
Tesla wants to start selling imported cars in India this year, but says taxes in the country are among the highest in the world.
There has been a request for tax deduction, first reported by Reuters In July, that prompted objections from several local players, who say such a move would hamper investment in domestic manufacturing.
Tesla executives, including India’s head of policy Manuj Khurana, put the company’s demands to PM Modi’s executives in a closed-door meeting last month, arguing that the taxes were too high, four sources familiar with the discussion said.
According to a source, during the meeting at Mr Modi’s office, Tesla said India’s duty structure would not make its business a “viable proposition” in the country.
Read more:
India imposes an import duty of 60% on electric vehicles costing $40,000 or less and 100% on vehicles costing more than $40,000. Analysts have said that Tesla cars at these rates will become too expensive for buyers and could limit their sales.
Three sources said Tesla has also separately requested a meeting between its chief executive Elon Musk and PM Modi.
PM Modi’s office and Tesla as well as its executive Mr Khurana did not respond to a request for comment.
It is not clear what exactly PM Modi’s office told Tesla in response, but four sources told Reuters That government officials are divided on the American automaker’s demands.
Some executives want the company to commit to local manufacturing before considering any import tax breaks.
Sources said the impact on the local auto industry is also a matter of concern to the government.
Indian companies such as Tata Motors, which recently raised $1 billion from investors including TPG to boost EV production locally, have said that giving concessions to Tesla is contrary to India’s plans to boost domestic EV manufacturing. Will happen.
“If Tesla was the only EV maker, the reduced duty would have worked. But there are others,” said one of the sources with direct knowledge of the government’s thinking.
The transport minister said this month that Tesla should not sell China-made cars in India and instead build locally, but Tesla has indicated it wants to experiment with imports first.
Mr Musk said on Twitter in July that “if Tesla is able to succeed with imported vehicles, a factory in India has great potential.”
The Indian market for premium EVs is still in its infancy and charging infrastructure is scarce. Of the 2.4 million cars sold in India last year, only 5,000 were electric.
A government official said lowering tariffs for a limited period to pave the way for Tesla’s entry could “boost India’s investor-friendly image and green credentials” and attract more investments.
.