India has once again turned down Tesla’s demand for tax breaks to import Electric Vehicles (EVs).
Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs, said in an interview that rules already allow partially-built vehicles to be brought in and assembled locally at a lower levy.
“We looked at whether the duties need to be re-jigged, but some domestic production is already happening and some investments have come in with the current tariff structure. So, it is clear that this is not a hindrance,” Johri said.
India has taxes as high as 100 percent on imported Evs and Elon Musk has urged them to lower it so that his company is able to sell vehicles built elsewhere at competitive prices. The import duties are lowered to the range of 15-30% on parts shipped for assembly in the nation.
EVs account for less than 1% of the Indian auto market, which is dominated by smaller sized petrol cars from Maruti and Hyundai.
About two weeks ago, Musk replied to a Twitter post query on Tesla’s availability in India, saying: “Still working through a lot of challenges with the government”.
At 100% taxes on any vehicle costing $40,000 and upwards, the lowest Tesla model is expected to cost above INR50,00,000, which will move it into the luxury segment of cars.
Several Indian states are wooing Tesla to come and set its base in their cities.
Johri said Tesla should follow the lead of domestic companies like Mahindra & Mahindra and Tata Motors, which are investing in building local capacity for EVs, and added: “There are others importing completely built units. That route is open.”
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