Tesla’s much-awaited India debut may hinge on a possible meeting between CEO Elon Musk and prime minister Narendra Modi.
Last month Tesla executives in India approached Modi’s office for such a meeting, news agency Reuters reported on Oct. 20, to discuss the matter of higher import duties on electric vehicles (EV).
In July, Musk had tweeted about this.
We want to do so, but import duties are the highest in the world by far of any large country!
Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India.
— Elon Musk (@elonmusk) July 23, 2021
Currently, India imposes a 100% import duty on fully-imported cars on fully imported cars with the cost, insurance, and freight value of more than 29.7 lakh rupees ($40,000). Those costing less than that attract an import duty of 60%.
Tesla’s problem with import duties
In the fresh round of discussion reportedly held “behind closed doors” in September, Tesla executives argued with government officials that it wasn’t viable for the company to do business in India under the current duty structure, which will make its car unaffordable.
The Modi government has, on the other hand, time and again refused any rebate. However, it has suggested that this could be reconsidered if the US firm manufactured in India.
Echoing this view a day after the Reuters report was published, the government’s think tank Niti Aayog assured Tesla of benefits if it makes cars in India.
Tesla’s India debut
In January, Tesla registered an India unit in Bengaluru but hasn’t yet sold any cars in the country.
Last month, an unexpected Model 3 ride by a government transport official with a Tesla India executive sparked hope that a countdown has begun. Talks of a Tesla Gigafactory in India are also doing the rounds.
Tesla did not reply to Quartz query on this.
“Our government wants some forward-looking plans from Tesla in order to provide rebates in import duties. So hopefully we will see some action from Tesla soon,” said Nikhil Chaudhary, a college student and co-founder of the Tesla Club India.
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