US entrepreneur and business magnate Elon Musk gestures during a visit at the Tesla Gigafactory plant under construction, on August 13, 2021 in Gruenheide near Berlin, eastern Germany.
(Photo : PATRICK PLEUL/POOL/AFP via Getty Images)
Tesla's plans to launch its famed electric cars in India may not be happening anytime soon, with chief executive officer Elon Musk saying that the company is still working through many challenges with the Indian government.
Import tax still the main sticking point for Tesla and India
Musk made the remark after Pranay Pathole asked him on Twitter about an update on when Tesla will launch in the subcontinent. Pathole said that Teslas are pretty awesome and deserve to be in every corner of the world. Musk replied to Pathole's query, and the answer surely will sadden Tesla's Indian fans.
The main sticking point between Tesla and the Indian government is the import tax on electric vehicles. Musk wants Indian Prime Minister Narendra Modi's office to cut import taxes on electric vehicles before Tesla enters the market.
Musk had argued in the past that launching electric vehicles in India would be difficult because of the country's high import duties. He posted a tweet back in July, saying that India's import duties are "the highest in the world by far of any large country!"
As it stands, India demands customs duty on imported cars ranging between 60 percent to 100 percent. The country also imposes a 100 percent import duty on fully imported cars with a Cost, Insurance and Freight (CIF) value of over $40,000. For cars that cost less than that amount, India imposes a 60 percent duty.
The Indian government has rejected Musk's claims, with sources telling news outlet BusinessToday that Tesla wants lower import taxes in the country without committing to production in India.
Related Article: Tesla vs Hacker: 19-Year-Old Makes Hacking Claim; Takes Control of 25 Teslas in 13 Countries
India's EV market is a lucrative one for automakers
The Indian EV market presents great growth opportunities for carmakers across the globe, with the government targeting at least 65 percent of all new vehicle sales to be electric by the year 2030. India is the world's second-most populous nation, and its auto market is now the world's fifth-largest.
That is the main reason why Tesla registered Tesla Motors India and Energy Private Limited in Bengaluru back in January 2021. According to a report by Reuters, Tesla planned to start its operations in India by importing and selling its popular Model 3 sedan.
However, the Indian government wanted Tesla to produce its electric cars in India instead, resulting in a stalemate. To entice Tesla to do such a thing, India's transport minister told Reuters that the government was prepared to offer the US-based company incentives to produce their electric vehicles in the country.
Musk was open to the idea of Tesla producing its cars in India, tweeting that it is "quite likely" that the company would build an EV factory in the subcontinent. Musk added that this would only occur if Tesla could import completed vehicles at lower tax rates in India.
READ MORE ON AWN:
See Now: OnePlus 6: How Different Will It Be From OnePlus 5?
