Tesla requests government for import duty exemption to launch in India

Anand Murali June 15, 2017

Electric carmaker Tesla is in talks with the Indian government to get exemption from “import penalties/restrictions” until a local factory is built.

The company’s founder and chief executive Elon Musk on Wednesday sent out the following tweet:

 

 

For Tesla to launch at a competitive price in India, the company will need to bring its prices down. One way of doing that is by finding ways to reduce the import duty on cars. Currently importing fully built units (FBUs) attracts 100% to 120% import duty, making the cars too expensive for sale in India.

The Indian government is also on a mission to ensure an electric/hybrid vehicle population of about 6-7 million in the country by 2020 along with some level of indigenisation of the technology.

For Tesla to launch at a competitive price in India, the company will need to bring its prices down. One way of doing that is by finding ways to reduce the import duty on cars  

The tweet also hinted at the company’s plans to setup a local factory for Tesla car production in India.

FactorDaily had reported earlier that Tesla is in talks with component makers, including Germany’s Dräxlmaier Group and Italy’s Magneti Marelli, to source electric parts for its India venture.

In 2016, transport minister Nitin Gadkari had visited Tesla in California and proposed to Tesla to start a plant for production of its electric cars in India according to a report. Prime Minister Narendra Modi had also visited the Tesla facility on his US trip in 2015.

Late last month, Musk had Tweeted that Tesla’s launch in India might be delayed because of local sourcing norms. “Maybe I’m misinformed, but I was told that 30% of parts must be locally sourced and the supply doesn’t yet exist in India to support that,” Musk tweeted.

The Indian government is also on a mission to ensure an electric/hybrid vehicle population of about 6-7 million in the country by 2020 along with some level of indigenisation of the technology  

The government’s Make In India Twitter handle responded to Musk with a clarification saying that there is no rule on foreign direct investment in automobile manufacturing that asks for a 30% local sourcing of components.

In February 2017, Tesla founder Elon Musk had tweeted that Tesla Motors may launch their electric cars in India in the summer of 2017.

Tesla had started taking pre-orders from Indian customers for its Model 3 sedan in April 2016 after its global unveiling. Many customers from India had pre-ordered Tesla Model 3 for $1000.

The price for Tesla’s Model 3 start from $35,000 and the final production model is set to be unveiled in July 2017. The price of Tesla’s Model 3 in India is not known yet.

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