Modi Govt Keen to offer Support to Tesla if they Manufacture their Iconic Electric Vehicles in India

On Friday, Union Minister has stated that, he has asked the US based Tesla several times to manufacture its iconic Electric Vehicles in India, at the same time, we would offer all support needed by the govt, to the company.

While Addressing "India today conclave 2021, Gadkari, has further stated that, electric cars manufactured by Tata Motors are not less good than electric cars manufactured by Tesla.

Tesla, do not sell electric cars in India, which your company has manufactured in China. You must manufacture electric cars in India, Exports cars from India, he stated.

Tesla has demanded reduction in import duties with regards to Electric vehicles (EVs) in India.

Whatever support you (Tesla) you require, it would be provided by our government, Gadkari added. The road transport as well as highways minister has stated that he is still in dialogue with Tesla officials regarding the company's demand related to tax concessions.

The Previous month, the heavy industries ministry had also asked Tesla to 1st start manufacturing its iconic electric vehicles in India, before they can have any tax concessions to be considered.

At the moment, the cars have been imported completely built units(CBUs) in order to attract customs duty ranging from 60 to 100 %, depending on the size of the engine as well as cost, insurance and freight (CIF) value less or above USD 40,000.

In a letter to the road ministry, the US firm has said that, the effective import tariff of nearing to 110% on vehicles having customs value more than USD40,000 is prohibitive to zero –emission vehicles.

Tesla has made requests to the government to standardize the tariff on electric cars to 40% irrespective of the customs value and withdraw the social welfare surcharge of nearing to 10% on electric cars. It has said, that these changes will boost the development of Indian EV ecosystem and the company would make significant direct investment in sales, service and charging infrastructure and it would significantly increase procurement from India for its global operations.

The company has argued that the above proposals will not have any negative impact on the Indian automotive market as no Indian OEM presently produces a car (EV or ICE) having ex-factory price above USD 40,000 and a mere 1 to 2 % of cars sold in India (EV or ICE( have ex-factory/customs value above USD 40,000.

Recently, Gadkari has stated that, Tesla had a golden opportunity to set up its manufacturing facility in india, given the nation's thrust on e-vehicles. Tesla has already started sourcing varied auto components from Indian automakers as well as setting up base here, it would be economically viable for it, he had stated.