Tesla’s efforts to enter the Indian market seem to be making progress as India mulls over a potential policy shift. The country is reportedly contemplating a reduction in import taxes for automakers willing to manufacture some vehicles within its borders, a move that comes following a proposal from Tesla. The automaker has faced challenges entering India due to its high import taxes, which currently reach 100% for vehicles exceeding $40,000. The starting price for Tesla’s popular Model Y crossover is $47,740 in the US before tax credits.
Reports from Reuters indicate that India is considering a revised policy that would allow automakers to import fully assembled vehicles with a potentially lowered tax rate of around 15%. While the government is reportedly showing interest in Tesla’s proposal, the policy is in its early stages and the adjusted tax rate remains subject to change.
An official acknowledged an alignment with Tesla’s proposal and the government’s interest in it. Additional sources noted that reduced import taxes could enable Tesla to introduce its full lineup of vehicles to the Indian market, extending beyond its flagship models. Tesla is also reportedly contemplating the production of an affordable electric vehicle in India, priced at approximately $24,000.
However, the official cautioned that the government might proceed cautiously due to potential disruptions in India’s auto market. Such tax adjustments could pose risks to local players like Tata and Mahindra. Despite the government’s enthusiasm for having Tesla in the market, the official indicated that the process would involve thorough deliberations, acknowledging the potential impact on domestic automotive manufacturers.
(Source: Aditi Shah | Nikunj Ohri | Aditya Kalra | Reuters)
