Tesla had stated that the exorbitantly high import taxes in India is a major problem that is causing delays in Tesla’s entry into India. Elon Musk had tweeted citing concerns about the import duties of 60% to 100% by the Indian Government. He was looking for some temporary relief to enable rapid entry and adoption of Tesla cars in India. This would have also ensured the popularity of electric cars in general and people embracing the technology in spite of high costs, range anxiety and poor charging infrastructure. However, the Ministry of Power and Heavy Industries has stated clearly that no discussion regarding the relaxation of import duties is under consideration. This will prove to be the final hurdle for the American auto giant before starting its Indian operations.
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Import Taxes A Major Problem For Tesla In India
According to the import norms, if a vehicle costs more than $40,000 US, it is subjected to a whopping 100% import duty. This doubles the price of the vehicle directly. The customers and carmakers have to bear the effects of it. This discourages people to go for such vehicles. In this case, this poses a challenge to accept the electric technology widely as well. So, no one really benefits from it. Therefore, Elon Musk’s concerns are genuine and could have an impact on the development of electric mobility technology and infrastructure in the country.
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On the other hand, the Government also recognizes this and has many subsidies and domestic tax relaxations in place to promote the adoption of electric technology. You must’ve heard about the FAME-II subsidy scheme under which the EVs buyers are eligible for massive subsidies and discounts. Thereupon, some State Governments are also proactive in extending the subsidies to ensure rapid adoption of EVs. These include the states of Delhi, Gujarat and Maharashtra which offer additional subsidies contributing to large discounts. These states will house the cheapest versions of the EVs of any model. The local car manufacturers want the Government to push the local technology to keep the costs in check.
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Other Problems
Depending on the response from the Indian customers, Tesla might also establish a manufacturing facility in India. That will contribute immensely to the Indian economy and attract the concerned manufacturing plants as well like batteries and other electronic components. However, the current level of charging infrastructure is lacking in many ways in even the major cities of the country. The Government and private companies are working tirelessly towards improving the charging infrastructure and the progress is actually quite rapid. All in all, one can clearly see both sides of the argument. What does Tesla think about Government’s decision remains to be seen.
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The post Tesla India Launch to Suffer More Delays As Govt Refuses to Lower Taxes? appeared first on Car Blog India.
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