Monday, May 16, 2022

Tesla reportedly gets India to consider slashing taxes on EV imports

Tesla reportedly gets India to consider slashing taxes on EV imports
Tesla reportedly gets India to consider slashing taxes on EV imports

The Indian government is considering slashing taxes on EV Imports up to 40% from 60% after Tesla Inc’s (TSLA. O) appeals for a cut polarized the country’s auto industry. On import of EVs, those valued at less than $40,000 – including the car’s cost, insurance, and freight, the government is taking into consideration to reduce the tax rate to 40% from 60% presently as per reports. 

In July, Elon Musk told he wants to bring Tesla to India, but import taxes are too high, on top of that, the company doesn’t have any facility in the country to produce its vehicles currently. Though Tesla and other foreign carmakers are in favor of tax cuts, Indian manufacturers like Tata want the local companies to also benefit from these cuts. Car sales in India wander around 3 million per year. EVs aren’t nearly as popular as gas-powered engines to make a dent in overall market share. That can be justified as they are generally significantly more expensive than the raft of ICE models available, the country doesn’t have much of a public charging point infrastructure as of now.

Why is government slashing taxes on EV imports?

If it sees the Tesla company providing benefits to the domestic economy (manufacture locally, for an instance) as reported by Reuters. Auto-making giants including Daimler’s (DAIGn.DE) Mercedes-Benz and Audi have lobbied for lower import duties on luxury cars for years but faced strong resistance mainly from domestic companies. But the Indian government is taking it into consideration for the first time after Tesla’s appeal. This might be due to India’s ambitious goals for EV adoption by 2030: it wants 80% of two-wheelers and 30% of four-wheelers.

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