Tata Motors on Tesla duty cut: Goes against Indian govt’s FAME scheme

Electric vehicles are gaining popularity and things became even more interesting this year when electric car manufacturer Tesla officially announced their entry into Indian market. Tesla is currently planning and working on setting up their dealerships and their first product for Indian market will be a Model 3 electric sedan. Tesla has been constantly appealing Indian government to cut down import duties on electric cars and it looks like government might actually be planning to do it. Tata Motors has now come up with a claim that cutting import duty on electric cars actually goes against Indian govt’s FAME scheme, which promotes indigenisation of electric vehicles and localisation.

Shailesh Chandra, President, Tata Motors, passenger vehicles business unit said, “FAME has really focused on two aspects. The first aspect is bringing affordable EVs… which are less than Rs 15 lakh. The second very clear articulation is localisation. Because if you have to really drive electrification on a sustainable basis, till you don’t ensure a road map for local value addition, this will not be sustainable.”

He also said that rather than reducing import duties on electric vehicles, governmet should make efforts to improve localisation as it would result in making electric vehicles cheaper or affordable for customers and this will in turn result in attracting more customers towards electric vehicles. Tata Motors is currently the leader in personal electric vehicle segment in India. Tata Nexon EV accounts over 90 percent of the electric vehicles sold in the country. Tata also launched their second EV in personal vehicle segment – the Tigor EV recently.

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India’s second largest car manufacturer Hyundai had also supported Tesla to reduce the import duties on electric vehicles. This response from Tata Motors comes after various reports suggesting that Indian government might consider lowering the import duties on electric vehicles. According to reports, senior government officials have confirmed that the import duties might be lowered to 40 percent. Discussions regarding the same are still going on and no information regarding the same has been announced officially.

Tesla will be launching their Model 3 sedan in the market first. Indian government had requested Tesla to set up a manufacturing plant in India but, Tesla responded to that by saying that they want to initially import the vehicles and will only think about setting up a plant after looking at customer response. Many Indian states have already invited Tesla to setup a manufacturing facility. As Tesla will be importing their vehicle to India as CBUs, they are going to be offered at a premium. Model 3 which is the entry level Tesla will cost around 60 lakh which makes it inaccessible to many customers. By lowering import duties, Tesla can offer the cars at a much lower price and that will attract more customers too.

Tesla has now completed homologation and they have received approval for four vehicle variants in Indian market. Tesla Model 3 and Model Y have already been spotted testing on our roads so, it is safe to assume that two variants of both these models will be offered in the market.

Via: ET

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