Tesla Needs To Start Production In India Before Asking For Tax Relief: GOI

The American EV maker had urged the Indian government to reduce import taxes on EVs to bolster electric vehicles’ sales in the country

Tesla’s attempts to push the government of India to reduce import taxes on electric vehicles seem to be falling on deaf ears. According to PTI, the Ministry of Heavy Industries wants the EV maker to start production in India before considering any plea for tax benefits. 

It’s no secret that Tesla wants to enter the Indian market, and it has been trying to set up a base here for a few years now. In fact, it has already registered its business in India under the name Tesla India Motors and Energy Pvt. Ltd. It is also testing its vehicles in the country. Test mules of the Model 3 have been spotted multiple times here, with even Model Y being spotted recently. What's more, Tesla has also homologated models in India, which are believed to be variants of the Model 3 and Model Y.

The government, however, is rigid in its stance. Tesla’s hesitancy in giving into the government’s demands is expected to stem from the fact that setting up an EV factory requires a sizeable outlay. And the American EV giant will first want to gauge the demand here by offering CBU (Completely Built-Up) units before moving with a heavy investment.

Also Read: Model 3 Aside, Tesla’s Now Started Testing The Model Y Electric SUV In India

Hyundai, too, has been supportive of Tesla’s request, but Indian players like Tata Motors and Ola Electric are against the move. They believe a reduction in import tax would hurt domestic manufacturing and jeopardise homegrown carmakers committing large sums to set up EV factories and related infrastructure in India.

From the looks of it, Tesla doesn’t want to lock in its India future without seeing concrete sales numbers and the government, on the other hand, wants Tesla to first commit a significant outlay to bolster the economy. It remains to be seen if the carmaker will press ahead with its plans for the country, considering the government’s stance is unlikely to change anytime soon.