Elon Musk’s Tesla to enter India soon? Centre’s new policy may benefit EV maker
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The Indian government is reportedly finalizing a policy to extend concessional import duties on electric vehicles (EVs), a move that could significantly benefit Elon Musk’s Tesla in the country. Months after expressing interest in the Indian market, Tesla may be on the brink of entering, as the government considers extending concessional import duties on EVs exceeding ₹30 lakh ($36,000) for 2-3 years. This potential policy change aims to boost employment and reduce EV prices in India.
As part of the plan, the reduction in import duties might be tied to Tesla providing bank guarantees for establishing an EV manufacturing plant in India. The speculation of Tesla entering the Indian EV market surfaced during the Vibrant Gujarat 2024 summit, but no concrete decisions were made by the billionaire regarding the setup of an electric vehicle plant in the state.
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has expressed its intent to invest up to $2 billion in India if the import duty is reduced to 15 percent for the first two years of operations. The government is contemplating the reduction of concessional import duties based on bank guarantees, which can be encashed if Tesla fails to adhere to the stipulated investment timeline.
Bad news for domestic EV makers?
Currently, companies like Mahindra and Mahindra, Tata and Ola Electric lead the space in electric vehicle manufacturing in India. These companies have often urged for a level playing field, and concerns have been raised regarding an unfair advantage towards Tesla.
Mahindra & Mahindra reached out to government officials to assert the need for a level playing field, urging for a boost in manufacturing inside India. Ola CEO Bhavish Aggarwal has also been against the idea of importing electric cars from foreign players, saying that offering incentives to Tesla and other international firms can lead to a major hit in sales for domestic players.
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