Tesla urges Indian government to slash import taxes, requests a meeting between Elon Musk and Prime Minister Modi

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Tesla urges Indian government to slash import taxes, requests a meeting between Elon Musk and Prime Minister Modi
Tesla wants to start selling imported cars in India this year.Tesla
  • Tesla has reportedly held a meeting with government officials to reduce import taxes levied on electric vehicles.
  • The EV maker wants to start selling imported cars in India by this year.
  • The company has also requested a meeting with Tesla founder Elon Musk and Prime Minister Narendra Modi.
Tesla’s plan to enter the Indian market this year has been put on hold due to the high import taxes on electric vehicles. In hopes to make its India debut, Tesla has again urged Prime Minister Narendra Modi’s office to slash import taxes on electric vehicles, according to a report by Reuters.

The Indian government levies a 60% import tax on electric vehicles priced $40,000 or less, and 100% on those priced above $40,000. In comparison, Tesla cars start at $44,690 (approx. ₹33,41,780) in the US, and selling cars in India with these import taxes would result in exorbitant prices for consumers and eventually hamper the company’s sales.

Tesla executives along with Manuj Khurana, the company’s head of policy in India met with government officials last month in a closed-door meeting to discuss the high import taxes and requested for them to be reduced, the report said. The company has also put in a request for a meeting between its chief executive officer Elon Musk and Prime Minister Modi, the report added.

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The Indian officials are reportedly divided on the decision to slash import taxes for Tesla. This isn’t the first time Tesla has made this request as the company asked for the same in July this year but it was met with backlash from Indian companies like Tata Motors who said that this move would actually go against India’s plans of boosting local EV manufacturing.

The officials also reportedly want Tesla to commit to local manufacturing before considering reduction in import taxes. Reuters also quoted one of the sources as saying that if Tesla was the only EV maker then slashing import duties would have been possible. But the EV maker wants to experiment with imported cars first, and Musk had also said that if this is a success then “a factory in India is quite likely."

The Indian government may consider slashes in import taxes if Tesla ramps up local manufacturing in the country, and share its detailed manufacturing plans, Bloomberg had reported in August. Tesla had asked the government to reduce the import taxes to 40%, and a 10% social welfare surcharge to be scrapped as well.

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