The Centre on Friday said it will lower import taxes on certain electric vehicles for companies committing to at least $500 million in investment and manufacturing facilities within three years, potentially bolstering Tesla’s plans to enter the market.
Maruti Suzuki India’s Chairman R C Bhargava said there are enough ‘safeguards’ in place for India’s domestic EV makers that minimises any impact for them from foreign entities like Tesla.
The Centre on Friday said it will lower import taxes on certain electric vehicles for companies committing to at least $500 million in investment and manufacturing facilities within three years, potentially bolstering Tesla’s plans to enter the market.
“New EV policy is designed to bring in new technology to India. Because the policy is for high cost cars and the upper end of the market, I do not expect any impact on domestic manufacturers,” Bhargava told CNBC-TV18 and Business Standard in two separate interactions.
“A negative impact or damage, if any, will be minimal,” he said.
The policy is seen as a big win for Tesla as it’s in line with what the company had been lobbying for in New Delhi. Sources said last July that the carmaker had offered to build a factory but, in the meantime, wanted a cut in import taxes that CEO Elon Musk said were among the highest in the world.
For years, Musk has tried to enter the Indian market but New Delhi wasn’t keen unless he committed to local manufacturing. Tesla officials visited India several times in recent months, with Musk also meeting Prime Minister Narendra Modi last year.
Companies that meet the investment and manufacturing requirements will be allowed to import a limited number of EVs at a lower tax of 15% on cars costing $35,000 and above. India currently levies a tax of 70% or 100% on imported cars and EVs depending on their value.
Tesla’s cheapest vehicle, the Model 3, starts at $38,990 in New York, according to the carmaker’s website.
