US-based Tesla is working through many challenges with the Government to launch its products in India, the electric car major’s founder and CEO Elon Musk said on Thursday.
Responding to a tweet on the company’s plans to launch its products in India, Musk tweeted: “Still working through many challenges with the government.”
Last year, Tesla had sought a reduction in import duties on electric vehicles (EVs) in India.
The heavy industries ministry had asked the electric car major to start manufacturing its iconic electric vehicles in India before any tax concessions could be considered.
The government sources had noted that they were not giving such concessions to any auto firm. Giving duty benefits to Tesla will not send a good signal to other companies that have invested billions of dollars in India.
Currently, cars imported as entirely built units (CBUs) attract customs duty, ranging from 60 to 100 percent, depending on the engine size and cost, insurance, and freight (CIF) value less or above USD 40,000.
At present, Tesla can bring in tesla cars in CKD form with zero duty and assemble and sell them here. As per government sources, the Centre has put a PLI scheme for the auto sector, mainly EVs, under which Tesla will benefit if they produce here.
However, the company wants Government to reduce import duties on cars without any commitment to producing in India.
The sources say that by such tweets, Tesla is trying to put pressure on Government using social media, which is not the first time.
In a letter to the road ministry, the US firm had last year said that the effective import tariff of 110 percent on vehicles with customs value above USD 40,000 is “prohibitive” to zero-emission vehicles.
The electric car major had requested the Government to standardize the tariff on electric cars to 40 percent, irrespective of the customs value, and withdraw the social welfare surcharge of 10 percent on such vehicles.
It had said that these changes would boost the development of the Indian EV ecosystem. The company will make significant direct investments in sales, service, and charging infrastructure; and significantly increase procurement from India for its global operations.
In January 2021, Tesla registered its Indian arm amid indications that it is set to enter the country’s automobile market.
According to a regulatory filing, the firm registered Tesla India Motors and Energy Pvt Ltd with RoC (Registrar Of Companies) Bangalore.
The company has been registered as an unlisted private entity with a paid-up capital of Rs 1 lakh.