Tesla’s Musk Wants EV Import Tax Lowered; Indian Govt Says No

tesla model s plaid

Tesla’s CEO Elon Musk wanted the government to reduce tax duties for passenger electric vehicles by as much as 100 per cent

The speculations surrounding Tesla’s entry into India have been there for years now and Elon Musk has often been vocal about it on Twitter too. He has also criticised the government’s policies and stated that the import duties are a major hindrance for the brand from bringing its cars to India even though they have often been spotted testing on public roads.

The Indian government has denied the requests of the Tesla CEO as it refuses to offer tax relaxations for fully imported electric vehicles saying that the rules are for everybody to follow. While the central authorities have considered the idea, they have ruled that the policies work well for every other carmaker and thus they should work for Tesla too.

Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs, told Bloomberg on Thursday that they had looked at whether the duties need to be re-aligned or not. However, he reiterated that the existing tax structure has attracted local production and brought in new investments and decided that it is not a hindrance.

Tesla Model 3 wallpaper

Elon Musk wanted the government to reduce tax duties for passenger electric vehicles by as much as 100 per cent so that his brand could have a strong presence in the market, and if that happened the chances of Tesla building a factory in India were highly likely. Some of the state governments asked for tax drops too and five of them invited Tesla to establish factories at their premises.

Johri noted that the government asked Tesla to present its plans for setting up local manufacturing unit and procurement, but the American EV producer has not done so. Global automakers including Mercedes-Benz are committed to setting up EV manufacturing units in India under the current tariff structure and the government could see more possibilities from it.

The passenger EV space is a slow-burner in India but it will eventually grow to greater heights. Some of the mainstream manufacturers like Tata Motors and Mahindra are already making moves while more volume-based brands will certainly make their presence felt as well in the coming years. Over the last 12 months, we have seen plenty of activity in the luxury segments too.