There seems to be a tug-of-war between the Indian government and the electric vehicle maker Tesla. The latter wants import duty cuts to enter the Indian market with its EVs. And now, a new report claims that the Indian government is insisting Tesla to buy $500 million worth of local auto components in order to be eligible for import tax cuts in the country. Tesla has also been reportedly told that it can start procuring local auto parts at a lower base.
Tesla is already on record saying last year that it would be sourcing more parts from India if tax concessions are offered, and it would also invest in EV charging infrastructure in the country.
The Indian government earlier was reported to have said that it was more in favour of local manufacture of cars rather than merely assembling them here, a route that Tesla seems more inclined towards.
- Tesla Model 3 Long Range (2021) review: the Model 3 is better than ever
- Tesla’s new affordable car being made in China - will India accept it?
Ball in Tesla's court now
A Bloomberg report quoting anonymous sources privy to discussion between India and Tesla said the car-maker would have to agree to ramp up domestic auto parts purchases by about 10-15% a year until an appropriate level had been attained. Further, Tesla must reportedly approach India with an auto parts sourcing plan that will be proportional to the company’s vehicle sales expectations for the country.
Tesla is also said to have been advised to export India-made components to China as well if it wants to imports cars from there.
Tesla, it may be recalled, wants to debut in India by selling imported cars first, and to make that viable, it wants import levies lowered. Imported EVs attract taxes as high as 100%, while import duties are between 15% to 30% on parts shipped for assembling here.
A Transport Ministry source reportedly said that Tesla was yet to comment on the recent updates.
Last July, Tesla CEO Elon Musk noted that import levies in India are among the highest in the world. But notwithstanding the challenges that Tesla has faced so far in its attempt to enter India, the EV maker has made some considerable progress over the past year. The company ahs received homologation certificates for seven of its car models, and Supercharger stalls have also been shipped to the country. A few States are ready to host Tesla plant in their region. In September of 2020, we heard that the company was in talks to set up a research facility in India.
But it is still Tesla's turn to respond to India's new overtures.
Want to know about the latest happenings in tech? Follow TechRadar India on Twitter, Facebook and Instagram!
