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Tesla CEO Elon Musk expects ‘temporary relief’ for electric vehicles in India in terms of import duty relaxation

According to Tesla CEO Elon Musk, the brand may establish a manufacturing operation in India if it first succeeds with imported automobiles in the country.

He did say, though, that India’s import levies are currently “the highest in the world,” and that he hopes for “at least a temporary tariff relief for electric vehicles.” Mr. Musk responded to fans on Twitter who urged him to offer Tesla automobiles in India, saying, “We want to do so, but import duties are the highest in the world by far of any large country!” Currently, India charges a 100% import duty on fully imported cars with a CIF (Cost, Insurance, and Freight) value of more than $40,000, and a 60% tariff on those costing less.

“Clean energy vehicles are treated the same as diesel or petrol,” Mr. Musk continued, “which does not seem entirely consistent with climate goals of India.” He, on the other hand, stated, “We are hopeful that there will be at least a temporary tariff relief for electric vehicles. That would be much appreciated”.  “If Tesla is able to succeed with imported automobiles, then a factory in India is quite likely,” Mr. Musk remarked when asked by a fan if Tesla might start with local assembly in India. Tesla had requested a reduction in import duty, according to a senior government official on July 23. Tesla has a golden opportunity to set up its production facility in India, according to Union Minister Nitin Gadkari, given the country’s push for electric vehicles.

According to the road transport and highways minister, Tesla is already sourcing numerous auto components from Indian automakers and that establishing a base here would be economically viable.

B.S. Yediyurappa, the Chief Minister of Karnataka, said in February that Tesla would establish a manufacturing facility in the state. Tesla India Motors and Energy Pvt Ltd has been registered with the Registrar of Companies in Bengaluru.

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