tesla manufacturing

Tesla likely to set up manufacturing unit in India

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American electric vehicle maker Tesla likely to set up manufacturing unit in India if it first succeeds with imported vehicles in the country. Tesla Inc. has sought lower taxes on import of electric vehicles in India

The California-based maker of electric vehicles has written to the transport and industry ministries for reducing import duty on electric cars to 40% from the current range of 60%-100% for vehicles depending on their import value.

Currently, India imposes 100 per cent import duty on fully imported cars with CIF (Cost, Insurance and Freight) value more than $40,000 (Rs. 29,77,100) and 60 per cent on those costing less than the amount. 

Tesla is seeking to enter India, one of the world’s biggest emerging car markets, where electric vehicles account for less than 1% of new passenger vehicles and two-wheeler sales compared with 5% in China. Even though the government has committed support in form of subsidies to promote EVs in the country, sparse charging infrastructure and high cost has meant low acceptance unlike China where Tesla set up its first factory outside of the U.S. and now dominates electric-car sales.

The company also wants the government to scrap the 10% social welfare surcharge on electric vehicles which was introduced in 2018. Tesla didn’t immediately respond to requests for comment. A transport ministry spokesman didn’t immediately respond to requests for comment.

The company has said the reduction in duty will help it make significant direct investments in sales, service, and charging infrastructure. The company plans to significantly increase procurement from India for its global operations and will evaluate broader investment in manufacturing and research and development following a successful launch.

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