Posted on 14 Nov 2023
The Indian government is reportedly considering a request by Elon Musk’s Tesla to reduce import tariffs for electric vehicles to 15%.
Citing government officials, the Financial Times reported that Tesla has asked the government for an initial import tariff concession which would allow the automaker to offset the country’s high customs duties. Currently, the South Asian nation charges a 70% tariff for cars valued under $40,000 and 100% for cars worth $40,000 or more.
The concession, which Tesla requested as a condition for setting up a plant in India, would apply to all EV manufacturers if it comes into effect. While the government is mulling a reduced tariff of 15% for EVs of all prices, the policy has yet to be agreed within the government, the report said.
“We want to create a package which is good for India and which doesn’t become a curated package for one company,” an official told the media. “Others are free to take advantage of this window, subject to meeting these kinds of requirements.”
Such a drop in import tariffs would allow global carmakers to enter India’s booming car sector. While electric passenger cars make up only 2.4% of the total market, the industry is growing. In the first nine months of this year, 75,000 passenger EVs were sold in the country, over twice the volume compared to the same period last year, Kallanish notes.
Till 12 November 2023, around 1.3 million battery electric vehicles (BEVs) of all types have been registered in the country, according to data published by India’s Ministry of Road Transport and Highways. In October alone, around 140,000 EVs were registered, up nearly 19% from October 2022.
Reports suggest that the country’s growing EV adoption is driven by favourable central and state government policies, as well as cheaper EV models entering the market. A recent Bloomberg report noted that around 86% of the electric cars sold in India this year cost under $20,000, with MG’s Comet mini car, selling for under $10,000, being the cheapest.
In June this year, Musk said Tesla would make a “significant investment” in India “as soon as humanly possible” after a meeting with Indian Prime Minister Narendra Modi in the US. The EV manufacturer is said to be currently planning a new plant in Mexico, as it aims to build 20 million cars a year. It currently operates plants in Fremont, Nevada, New York, Texas, Shanghai and Berlin.
Source:Kallanish
