The PMO asks the government departments to fast-track approvals for Tesla in India by January 2024. There have been several occasions when discussions have taken place in both India and the United States. In fact, during the recent visit of Prime Minister Modi to the US, he had a meeting with Elon Musk. Following that meeting, Musk announced Tesla’s intentions to make a substantial investment in India. However, Tesla has been actively requesting the government to reduce import duties to enable more competitive pricing for its electric vehicles. It appears that this long-awaited development might finally be on the horizon.
You may also like: Tesla Cybertruck Spotted Towing A Trailer For The First Time
Government Approvals for Tesla by Jan 2024
As per an ET report, a recent meeting in the PM’s office assessed the development of the electric vehicle manufacturing policies in India. This also includes Tesla’s planned entry. Until now, Tesla has been demanding a reduction in import duties. It currently sits at 60% for vehicles under $40,000 (approx Rs 33 lakh). However, these import duties are for luxury vehicles. Elon Musk wants a distinction between luxury cars and electric cars. Tesla wants this number to be 40% since these are eco-friendly cars.
You may also like: Tesla Valuation Looks Unsustainable: Wall Street Analysts
On the other hand, the Government could entertain this argument considering Tesla promises to setup a manufacturing facility in India. The aim is to boost the economy by bringing in local suppliers. Therefore, it would be a win-win situation for both parties. As a matter of fact, if the import duties on EVs are reduced, it will not be a Tesla-specific policy but will be applicable to the entire range of EVs from various carmakers. That could boost the mass adoption of EVs quite rapidly as people will get access to global EVs at a relatively lower price.
You may also like: Elon Musk Makes Tesla EV Superchargers Free in War-Hit Israel
You may also like: First-Ever Tesla Cybertruck to be Sold Fetches a Whopping $400,000
What We Think
The new electric vehicle policy has the potential to create opportunities, not only for Tesla but for all car manufacturers interested in establishing manufacturing facilities in the country. Even established automakers such as BMW, Audi, and Mercedes may opt to shift away from importing completely built-up units (CBUs) to India and instead explore local production. This move would have a twofold advantage: lowering luxury car prices for the local population and generating employment opportunities for the future. We will closely monitor the evolving developments in this arena.
