US-based Tesla is working with the government on many challenges to launch its products in India, electric car major Elon Musk’s founder and CEO said on Thursday.
In response to a tweet about the company’s plans to launch its products in India, Musk tweeted, “Still working on many challenges with the government.”
Last year, Tesla sought to lower import tariffs on electric vehicles (EVs) in India.
The Ministry of Heavy Industry had urged the electric car major to first start manufacturing its iconic electric vehicles in India before tax breaks could be considered.
Government sources had noted that they would not make such concessions to any automaker, and giving Tesla tariff breaks will not send a good signal to other companies that have invested billions of dollars in India.
Currently, cars imported as Completely Built Units (CBUs) are subject to customs duties ranging from 60 to 100 percent depending on engine size and cost, insurance and freight value (CIF) under or over $40,000.
Currently, Tesla can import CKD form Tesla cars duty-free and assemble and sell here. According to government sources, the center has introduced a PLI program for the automotive sector, particularly electric vehicles, which Tesla will benefit from if they produce here.
However, the company wants the government to lower import tariffs on cars without committing to producing in India.
The sources say that Tesla is attempting to use social media to pressure the government with such tweets, and this isn’t the first time.
In a letter to the Department of Transportation last year, the US company said the effective import tariff of 110 percent on vehicles with a customs value of more than US$40,000 was “unaffordable” for zero-emission vehicles.
The electric car major had called on the government to standardize the tariff for electric cars to 40 percent regardless of the customs value and to remove the 10 percent social security surcharge on such vehicles.
These changes would drive the development of India’s EV ecosystem and the company would make significant direct investments in sales, service and charging infrastructure; and significantly increase sourcing from India for its global operations.
In January 2021, Tesla registered its Indian arm amid signs that the company will enter the country’s automotive market.
According to a registration application, the company has registered Tesla India Motors and Energy Pvt Ltd with the RoC (Registrar Of Companies) Bangalore.
The company has been registered as an unlisted private company with a paid-up capital of Rs 1 lakh.
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