Tesla has pushed India to consider lowering the import tax on electric vehicles. Automakers that commit to some local manufacturing may receive a tax of 15% instead of the previous 100%. This will allow Tesla and other manufacturers to import fully assembled cars at modest taxes and study the real demand in the market.
India is working on a new electric vehicle policy, Reuters reported, citing several sources familiar with the case. It will reduce import taxes for automakers that commit to some local manufacturing. This issue came to the fore after Tesla began to actively seek to enter the Indian market, and lobbied the government to reduce import taxes.
The policy under consideration could allow automakers to import fully assembled electric vehicles into India at a reduced rate of just 15%. This would be a be a huge step towards progress. At the moment, cars worth more than $40,000 are subject to a 100% tax. For others, the tax is 70%, which is also very high. Reuters claims the information came from two senior Indian government officials.
If such a policy is adopted, it could lead to a sharp decrease in the cost of imported electric vehicles. However, local automakers are wary of this and are trying to avoid it.
Lower import taxes could help Tesla sell its entire line of models in India. While the local factory will produce the cheaper model, the reduced import taxes will open up the company to import all other vehicles with only a 15% tax. It should be kept in mind that such a policy is only being considered, and has not yet been adopted. Ultimately, it may be rejected or the tax rate changed.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.