Tesla, which will officially launch its first car in the Indian market later this year had a talk with the Indian government to reduce the import duties and taxes. Hyundai Motor India has backed that request and has supported Tesla. While Tata Motors and Ola did not like the idea of reducing the duties on imported vehicles.
Elon Musk, CEO of Tesla reinforced the fact that Tesla is willing to set up a factory in India. However, that depends on the success of the vehicles that the company will import as CBU to the country. But the success of the imported vehicles depends on their price. He requested the Indian government that imposes massive duties on imported vehicles, to considerably reduce them for electric vehicles. He also said that the government’s vision of climate control does not match with the high import duties on EVs.
The industry remains divided on the request. While Hyundai India feels that the government should reduce the duties, Tata and Ola Electric think otherwise.
Hyundai Motor India MD and CEO, S S Kim said in an interview with ACI,
“We have heard that Tesla is seeking some duty cuts on imports of CBUs. So, that would be very helpful for the manufacturers to reach some economy of scale in this very price competitive segment. It will take manufacturers time to localise EVs by 100 percent. We are developing made-in-India affordable mass-market EVs but at the same time, if the government allows some reduction in the duty on imported CBUs, that would be very helpful for all of us to create some market demand and reach some scale.”
Meanwhile, Hyundai is also planning to launch an affordable electric car in the Indian market by 2024. Without giving out the details, the all-new EV will have an ICE-powered cousin. More details will be revealed at a later date. Hyundai already offers the Kona EV in the Indian market, which became the first electric SUV in the Indian market.
Pawan K Goenka, who is retired MD of Mahindra also tweeted in favour of reducing the taxes and import duties for electric cars.
Tesla wants import duty reduction. I think Govt should consider lowering 100% slab to 60 % for EVs. @PiyushGoyalOffc
— Pawan K Goenka (@GoenkaPk) July 24, 2021
Tata and Ola oppose the move
Tata Motors, currently the leading electric vehicle manufacturer in India said on Monday that it expects the government to be consistent and follow the policies that it designed. Tata approached the central government after Tesla wrote to the ministries to lower the import duty on the cars.
P Balaji, CFO, Tata Motors said,
“From Tata Motors’ perspective, the Indian government through the FAME II incentives, eligibility criteria have been very clearly set for the direction in which the country should take to accelerate the adoption of EVs. This has always emphasised affordable EVs and also localisation as per the phased manufacturing plans. I am sure the government will remain consistent to that particular philosophy and the principles of FAME II. This is what all of us are working towards.”
Bhavesh Agarwal, Co-founder, Ola, opposed the request on Twitter.
Strongly disagree with both. Let’s have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import. We won’t be the first country to do so! https://t.co/n6k7ShYeJX
— Bhavish Aggarwal (@bhash) July 27, 2021