Tesla’s India plans dealt blow as minister rules out tax cut

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NEW DELHI: India said it has no plans to reduce import tariffs on electric vehicles, weeks later Tesla Inc called on the government to cut taxes, and his billionaire boss Elon Musk He raised the possibility of a local factory once it starts selling totally foreign-built units in the world’s second most populous nation.
“No such proposal is being considered in heavy industries ministry“Said Vice Minister Krishan Pal Gurjar. Parliament on Monday, referring to the ministry in charge of formulating policies for the auto industry. However, he added that the government is taking steps to promote the use of electric cars by reducing internal taxes and adding charging stations.
The response to lawmakers can be seen as part of the tug of war between Prime Minister Narendra Modi’s administration, which wants to boost local manufacturing, and Tesla, which urges India to allow it to import cars at a cheaper price before committing. to set up a factory in the field.
Tesla wrote last month to the transportation and industry ministries requesting that they lower import tariffs on electric cars to 40% from the current range of 60% -100%, Bloomberg News reported.
A Tesla factory to produce cars in India is “quite likely” if the electric car maker can start selling imported vehicles, CEO Musk said in a subsequent tweet.

Musk has for years shown his enthusiasm to enter one of the world’s most promising auto markets, but complained that Indian rules prohibit him from testing the waters first with imports, as high tariffs make Tesla cars “unaffordable. “.
Tesla is looking to foray into Asia’s third-largest economy, where electric vehicles account for less than 1% of annual car sales, compared to around 5% in China. Poor charging infrastructure and expensive cost have deterred large-scale adoption of electric vehicles in India, unlike in China, where Tesla established its first factory outside the US and now dominates electric car sales.
Those deterrents have also made Maruti Suzuki India Ltd, the leading local automaker selling all other cars on Indian roads, despite the acceptance of electric cars in the nation.
“Unfortunately, currently available technology leads to electric cars being produced at a much higher cost than conventional cars,” Maruti president RC Bhargava said in the company’s annual report on Monday. “This, coupled with the lack of charging infrastructure, makes it very difficult to sell electric cars to people who can only afford small cars.”
Market penetration for electric vehicles will be “very small” given that only 5% of cars sold in India are priced above Rs 15 lakh ($ 20,169), said Bhargava, who heads the local Japan unit. Suzuki Motor Corp. Per capita income in India is just $ 2,000, 5% that of Europe and Japan, putting expensive electric cars out of reach for most consumers, he said.
These statistics have raised concerns that without progress in cleaning the roads of poorer nations, global warming will not stay below dangerous levels even as wealthier nations plan to phase out combustion-engine vehicles to combat climate change. climate change. Most EVs are sold in the US, China, and Europe, where state-backed purchase incentives and investments in charging infrastructure make it easier for customers to move away from combustion cars.
To achieve net zero emissions, Maruti will work on hybrid models, improve technology for cars that run on compressed natural gas and study biofuels, Bhargava said. “The use of hydrogen is also an interesting alternative and should be considered especially to reduce dependence on imported lithium.”





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