Elon Musk says Tesla is quite likely to build a factory in India but only if import taxes are lowered

Elon Musk says Tesla is quite likely to build a factory in India but only if import taxes are lowered
Tesla CEO Elon Musk in Delaware this month. Matt Rourke/AP Photo
  • Tesla CEO Elon Musk on Friday said a new factory in India was "quite likely."
  • But he added that the country would first have to lower its import fees for completed vehicles.
  • Tesla has been lobbying government officials to lower import duties, Reuters reported.

Tesla is "quite likely" to build an electric-vehicle factory in India, but only if the company's able to import completed vehicles at lower duty rates, CEO Elon Musk said.

"If Tesla is able to succeed with imported vehicles, then a factory in India is quite likely," Musk said on Twitter on Friday. He added: "We want to do so, but import duties are the highest in the world by far of any large country!"

The California electric-vehicle maker has been lobbying Indian government officials to lower those duties, Reuters reported on Friday, citing two unnamed sources.

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In a letter, Tesla executives said they were seeking to bring taxes down to about 40% of the vehicle's value, according to Reuters. Current import taxes are between 60% and 100%, depending on the vehicle's value.

Tesla earlier this year registered a local company, Tesla Motors India and Energy Private Limited, raising expectations that the company would launch in the world's second-most populous country.


Local news reports in February said the company would set up its manufacturing plant in Karnataka, a southern state.

India's transport minister, Nitin Gadkari, in April said it would be "beneficial" for Tesla to enter the Indian market before competition heats up, The Hindustan Times reported.

"Day by day, the Indian product is also improving and within two years we will get the electric vehicles of Tesla's standard in Indian market. So, in the interest of Tesla, I suggest that they start manufacturing as early as possible," Gadkari said

Insider has reached out to Tesla for comment.

Musk on Friday said import fees weren't the only issue holding the company back. "Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India," he said.