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Business News/ Auto News / Bad news for Elon Musk's Tesla? Indian govt says no plans for providing exemption or subsidy on EV imports
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Bad news for Elon Musk's Tesla? Indian govt says no plans for providing exemption or subsidy on EV imports

India’s government said it’s not currently considering reducing taxes on imported electric vehicles, a stance that could delay Tesla Inc.’s plan to enter the market.

FILE PHOTO: Tesla Motors Inc. CEO and Chairman Elon Musk stands in front of the Tesla Roadster electric vehicle as he addresses the media during press days of the North American International Auto Show in Detroit, Michigan January 13, 2009. REUTERS/Rebecca Cook/File Photo (Reuters)Premium
FILE PHOTO: Tesla Motors Inc. CEO and Chairman Elon Musk stands in front of the Tesla Roadster electric vehicle as he addresses the media during press days of the North American International Auto Show in Detroit, Michigan January 13, 2009. REUTERS/Rebecca Cook/File Photo (Reuters)

In a major blow to Elon Musk's plans to make Tesla's presence felt in the Indian market, the central government has now said that it is not considering any proposal to grant subsidies or exemptions for the import of electric vehicles into the country.

Also Read: Tesla recalls over 2 million vehicles to fix Autopilot safety flaws

Minister of State for Commerce and Industry Som Parkash in a written reply to a question on whether the government has any proposal to exempt Tesla or any other foreign carmaker from local value addition said (as quoted by PTI)

Parkash's reply comes at a time when several media reports in the recent past had claimed that Musk's Tesla and the Indian government were on the same page about offering tax breaks to electric car makers to commit to manufacturing in India.

According to a Bloomberg report, Tesla and the Indian government had previously been at an impasse for a year. The electric car maker wanted lower taxes to sell its cars manufactured elsewhere at competitive prices in India first, while the Modi government wanted Tesla to start manufacturing its cars locally.

Following his meeting with Prime Minister Narendra Modi in June this year, Musk said the Prime Minister had urged Tesla to make "significant investments" in India and that he intended to do so.

"I am confident that Tesla will be in India and will do so as soon as humanly possible." Musk added.

A recent report by Economic Times had suggested that Tesla is willing to set up a factory for manufacturing electric cars in India only if the government approves a concessional duty of 15% on imported vehicles in the first two years of operations in India, a report by The Economic Times mentioned.

Citing sources, the English Daily said that Tesla has approached the Government of India with regard to the investment the company is planning to make and the number of cars it can import at lower duty.

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Published: 14 Dec 2023, 12:29 PM IST
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