Elon Musk’s Tesla plans to invest up to $2 billion in India’s plant but with riders
- Tesla is willing to set up a factory in India if the government approves a concessional duty of 15% on imported vehicles in the first two years of operations.
Elon Musk's Tesla Inc is willing to set up a factory of the posh 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.
Tesla Inc. has proposed to invest up to $500 million if the government extends concessional tariff for 12,000 vehicles. The company may reportedly increase its investment up to $2 billion in India's plant if the import duty is reduced for 30,000 vehicles.
Now, the proposal is being evaluated by the Department for promotion of Industry and internal trade (DPIIT, the ministry of heavy industries (MHI), the ministry of road transport and Highways (MoRTH), and the Ministry of finace under the guidance of Prime Minister's Office (PMO).
As per the ET report, the Centre is pondering to restrict the concessional tariffs up to 10% of the total electric vehicles projected to be sold in India in FY2023 (that is 10,000) and can be increased by 20% for the second year.
Last year, 50,000 EVs were in the country and the number may go up to 1 lakh in the current fiscal year.
Notably, India imposes 100% import duty on cars with cost, insurance, and freight value of more than $40,000 and 70% on vehicles below the aforementioned price.
TESLA IN INDIA
The US electric carmaker is planning to start its operation in India with these three models-- the Model 3 ($39,000), Model Y ($44,000), and a new hatchback ($25,000) in the US.
Tesla Chief Executive Officer Elon Musk said in June that Tesla plans to make a “significant investment" in India and he intends to visit in 2024.
Recently, Commerce Minister Piyush Goyal visited Tesla’s plant in Fremont and said that Tesla is planning to almost double purchases of auto parts from India to $1.9 billion this year. The electric carmaker sourced parts worth $1 billion from the nation last year, he said.
Tesla and India reopened dialog in May this year following a year-long impasse. Earlier Musk criticized India’s high import taxes and its EV policies, and India, in turn, has advised Tesla not to sell cars in the country that have been made in China, its political rival.
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Business NewsAuto NewsElon Musk’s Tesla plans to invest up to $2 billion in India’s plant but with riders
First Published:24 Nov 2023, 09:01 AM IST
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