It has been a while since Tesla or Elon Musk shared any update regarding India’s launch. We know that they have setup up headquarters but the exact launch detail and how will they operate is still now known. Now, Elon Musk has given an update on Twitter he said that Tesla is still working through a lot of challenges with the government.
This information surfaced when a Twitter user named Pranay Pathole asked Elon Musk about the launch in India and said that Tesla’s are pretty awesome and deserve to be in every corner of the world.
This is not the first time that Elon Musk has said that they are facing issues with the government. Last year, a YouTube creator called Madan Gowri requested Elon Musk to launch Tesla cars in India as soon as possible.
Elon replied to Madan by saying “We want to do so, but import duties are the highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India,”
Our country currently charges custom duty ranging from 60% to 100% based on the engine size, cost, insurance and freight value of the vehicle. Because of this the CBU or Completely Built Vehicles get so expensive. Tesla has been very competitive in the foreign markets but when entering India, the cost of vehicles would increase significantly because of import tax.
India currently has one of the highest import duties in the world. Elon has said that it is not fair to treat electric vehicles the same as petrol or diesel vehicles. Electric vehicles run cleaner, they are not powered by massive displacement engines that deliver poor fuel economy. So, why is Tesla facing the same import duty as an ICE powered vehicle?
Tesla has requested the government to reconsider the import tax duties. Otherwise, the price of Tesla would be one of the highest in the world. The manufacturer has said the government should standardize the traffic on electric cars to 40 percent irrespective of the customs value and withdraw the social welfare surcharge of 10% on electric cars.
The EV manufacturer has also said that this change in import tax will help in boosting the development of electric vehicles and the Indian EV ecosystem. To be fair, India is lacking in EV charging infrastructure which is one of the main reasons why people are not opting for electric vehicles. Moreover, the change in import tax would also help the company make significant direct investment in sales, service and charging infrastructure. It will also increase procurement from India to supply its manufacturing facilities around the world.
On the other hand, the government says that it will not be a good signal to the other companies that have invested billions of dollars in India. Some political leaders are inviting Elon Musk to set up a factory in India to manufacture and assemble Tesla vehicles. Some states have even offered land and subsidies to Tesla.