Bloomberg reported on February 4 that the Indian government rejected Tesla CEO Elon Musk's request for tax reduction for imported electric vehicles, saying that the regulations have allowed the import of incompletely assembled vehicles at a lower tax rate and local assembly and production.
According to reports, Vivek Johri, chairman of the Central Committee of indirect taxes and customs of the Ministry of finance of India, said on Thursday: "we have conducted research on the need to readjust tariffs, but some Chinese production has begun and some investment projects have operated under the current tariff structure. Therefore, it is clear that this does not constitute an obstacle."
Modi government has always encouraged Tesla to produce locally, but musk hopes that India will provide tax relief to enable Tesla to give priority to selling vehicles not made locally in India at competitive prices.
According to China auto news, the current tariff on imported cars in India is 60% - 100%, and the tariff on imported cars with a price of less than 3 million rupees (about $40000) is 60%. Imported cars with a price higher than this price have to pay 100% tariff, which is equivalent to doubling the price. At present, Tesla has only one model 3 with low configuration, and the basic price is less than $40000, while other models range from $40000 to $120000 respectively. Therefore, Tesla has proposed to the Indian government to reduce the import tax on electric vehicles to 40%.
Johri said that on the premise that the Indian government has proposed to formulate specific production plan requirements, Tesla failed to give a specific plant construction and production plan. Earlier this week, the Indian government budget did not mention any tax relief on the import of clean energy vehicles. However, Maharashtra, where Mumbai, India's financial capital, is located, publicly supported Tesla's request.
