Tesla Seeks Lower Taxes On Sale Of Imported EVs In India: Report

Tesla Inc. has sought lower taxes on import of electric vehicles in India, people with the knowledge of the matter said, as it looks to commence operations in Asia’s third-largest economy.

The California-based maker of electric vehicles has written to the transport and industry ministries for reducing import duty on electric cars to 40 per cent from the current range of 60 per cent-100 per cent for vehicles depending on their import value, the people said, declining to be identified as the matter is not public.

Earlier, Reuters reported that Tesla has pitched to Indian ministries to reduce federal taxes on imports of fully assembled electric cars.

The high import levy will deter sales, the company said in the letter dated July 5 seen by Bloomberg News. Any reduction will boost the development of the Indian EV ecosystem, Tesla said.

Tesla is seeking to enter India, one of the world’s biggest emerging car markets, where electric vehicles account for less than 1 per cent of new passenger vehicles and two-wheeler sales compared with 5 per cent in China. Even though the government has committed support in form of subsidies to promote EVs in the country, sparse charging infrastructure and high cost has meant low acceptance unlike China where Tesla set up its first factory outside of the U.S. and now dominates electric-car sales.

The company also wants the government to scrap the 10 per cent social welfare surcharge on electric vehicles which was introduced in 2018. Tesla didn’t immediately respond to requests for comment. A transport ministry spokesman didn’t immediately respond to requests for comment.

Earlier this month, transport minister Nitin Gadkari had said Tesla would soon enter the Indian market and the government was already working on building electric charging stations along some highways.

The company has said the reduction in duty will help it make significant direct investments in sales, service, and charging infrastructure. The company plans to significantly increase procurement from India for its global operations and will evaluate broader investment in manufacturing and research and development following a successful launch, the company said in the letter.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor