Key Highlights
- India rejects plans to provide subsidies for Tesla’s imported EVs
- It’s a blow to Elon Musk’s plans in the country
- Tesla remains open to an Indian manufacturing facility
In a setback for Elon Musk’s Tesla, the Indian government has declared that it has no intentions of offering exemptions or subsidies for the import of electric vehicles into the country.
In response to queries about potential exemptions for Tesla or other foreign automakers from local value-addition requirements, Minister of State for Commerce and Industry Som Parkash unequivocally stated that the government is not entertaining any such proposals. Also Read | Zeekr’s Game-Changing Fast-Charging LFP Battery For EVs Unveiled: Details
Contradictory Reports Dashed Hopes
Contrary to earlier speculation, recent statements from the government indicate a misalignment between Tesla and Indian authorities on the prospect of tax breaks for electric car manufacturers.
Earlier reports had suggested a consensus between Musk’s Tesla and the Indian government regarding potential tax incentives to encourage EV manufacturing within the country. However, Minister Parkash’s latest reply contradicts these expectations.
Tesla-Indian Government Impasse Unveiled
A year-long impasse between Tesla and the Indian government is now coming to light, with conflicting interests at the forefront.
While Tesla sought reduced taxes to facilitate competitive pricing for its cars manufactured abroad, the Modi government insisted on the company establishing local manufacturing operations. This revelation sheds light on the complexities underlying the negotiations between the two parties.
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Musk’s Commitment Faces Hurdles
Despite Elon Musk’s expressed confidence in bringing Tesla to India after a meeting with Prime Minister Narendra Modi, the recent government bearing poses challenges.
After meeting with Prime Minister Modi in June, Musk had conveyed his commitment to significant investments in India. However, the government’s refusal to grant subsidies or exemptions on EV imports may hinder Musk’s plans to establish a significant presence in the Indian market.
Tesla’s Conditional Offer For Local Manufacturing
A recent report suggests that Tesla is open to setting up an electric car manufacturing facility in India but with specific conditions.
According to the Economic Times, Tesla is reportedly willing to establish a manufacturing plant in India if the government approves a concessional duty of 15% on imported vehicles during the initial two years of operations. Sources indicate that Tesla has formally approached the Indian government regarding its investment plans and the number of cars it aims to import under the proposed lower duty.
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