On 13 January, responding to a Twitter user, Elon Musk tweeted about Tesla Inc.’s ongoing challenges with the government of India regarding the import duties on the sales of electric cars in India. Elon Musk had tweeted, “Still working through a lot of challenges with the government”.
A day after Elon Musk’s tweet, Telangana Industry and Commerce minister KT Rama Rao, retweeted, asking Elon Musk to set up shop for Tesla in India/Telangana. He wrote, “Will be happy to partner Tesla in working through the challenges to set shop in India/Telangana. Our state is a champion in sustainability initiatives & a top-notch business destination in India ”
Hey Elon, I am the Industry & Commerce Minister of Telangana state in India
Will be happy to partner Tesla in working through the challenges to set shop in India/Telangana
Our state is a champion in sustainability initiatives & a top notch business destination in India https://t.co/hVpMZyjEIr
— KTR (@KTRTRS) January 14, 2022
Tesla Inc, the electric Vehicle company had plans for selling imported electric tesla cars in India from last year and has been constantly urging the government of India to cut down the import taxes on the electric vehicles before selling them in the market. Tesla’s demand for import tax cuts has created objections from several local manufacturers.
Some Indian government officials want the company to consider local manufacturing before persuading for tax cuts, but tesla first wants to experiment with imports.
Musk has repeatedly complained about the high import duties on the car, making the cars highly expensive in the country. Thus, resulting in low sales. “I’m told import duties are extremely high (up to 100%), even for electric cars. This would make our cars unaffordable,” Musk had said last year in response to a tweet from an Indian follower.
Currently, India levies a 100% tax on imported cars of price more than $40,000 (Rs 30 lakh) inclusive of insurance and shipping expenses, and cars less than $40,000 are subject to 60% import tax. Tesla had reportedly sought 40% import duty on fully assembled electric cars instead of 60%.
Tesla Model 3 has a global price of $39,990 making it affordable in the U.S but, in India, due to the import duties, it would cost around Rs. 60 lakh, making it highly unaffordable.