100% import tax on EV cars costing more than $40,000
New Delhi, Aug 1 (IANS) | The rich and affluent in India have been waiting for Tesla cars to arrive, but in the meantime, a dispute between Elon Musk and the Indian government over import duties has made the wait longer. Tesla has been the most prestigious electric car company to enter the country over the years. Though the blue Tesla Model 3 was recently spotted on the roads in Pune, Tesla’s long journey won’t be easy yet. A long and painful journey has begun for Musk in India, where his only option to earn big money is to build and assemble cars locally under the government’s EV scheme.
The government may consider lowering import duties along with offering Tesla other concessions, but that would require the EV major to invest in setting up a manufacturing facility in the country. According to industry experts, import duty on fully imported cars in India is a major concern for Musk. Currently, India imposes a 100 percent tax, including insurance and shipping expenses, on imported cars valued above $40,000 (Rs 30 lakh), and a 60 percent import tax on cars less than $40,000.
Musk has also criticized government policies for electric vehicles (EVs), as they attract import duties similar to petrol and diesel cars, Soumen Mandal, Research Analyst for Automotive and Devices Ecosystem at Counterpoint Research, told IANS. He said, without the import duty exemption, Tesla would remain premium for the Indian market, but not ultra-premium. Musk recently said that he wants to launch the car in India, but the country’s import duty on EVs is by far the highest in the world.
He posted on Twitter, “We want to do this, but here the import duty is the highest in the world than any major country.” This isn’t the first time the Tesla CEO has raised concerns over import tariffs. Roy said he would expect Tesla to consider India’s three-pronged strategy. This should form a basis for software development, testing and R&D, as well as tracing distribution tie-ups for the charging network and support for Model 3 buyers, he said. In addition, the Model 3 must initially evaluate tie-ups for assembly, while sourcing local suppliers for components other than the body and motor.
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