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Tesla is urging Modi’s office in India to cut taxes before entering the market-sources

New Delhi: Tesla has asked India’s Prime Minister Narendra Modi’s office to cut import taxes before electric cars enter the market, four sources told Reuters from some Indian automakers. He hurriedly raised the demands he faced against.

Tesla wants to start selling imported cars in India this year, but says India’s taxes are one of the highest in the world. Reuters’ first report of a tax cut request in July prompted opposition from some local players that such a move would discourage investment in domestic manufacturing.

Tesla executives, including India’s policymaker Manuji Krana, accepted the company’s request to Modi officials at a private meeting last month and claimed that taxes were too high, four sources in detail in the argument. The source said.

At a meeting at Modi’s office, Tesla said India’s duty structure would not make its business in India a “feasible proposal,” according to one source.

India imposes a 60% import tax on electric vehicles under $ 40,000 and a 100% tariff on electric vehicles over $ 40,000. Analysts say that at these rates Tesla cars can be very expensive for buyers and limit their sales.

Tesla also submitted a separate request for a meeting between its CEO Elon Musk and Modi, three sources said.

Modi’s office, Tesla, and its executive Clana did not respond to requests for comment.

It’s not clear what Modi’s office specifically told Tesla in response, but four sources said Reuters officials were divided on the demands of US automakers. Some officials want the company to commit to local manufacturing before considering an import tax cut.

Concerns about the impact on the local auto industry also weigh heavily on the government, sources added.

Indian companies such as Tata Motors, which recently raised $ 1 billion from investors, including TPG, to increase EV production locally, said giving Tesla a concession would go against India’s plans to increase domestic EV production.

“If Tesla was the only EV maker, reducing obligations would have worked, but there are others,” said one source who knew the government’s ideas directly.

The Minister of Transport said this month that Tesla should not sell Chinese-made cars in India, but instead manufacture them locally, but Tesla said it would like to test imported cars first.

“If Tesla succeeds in imported cars, it’s very likely that it has a factory in India,” Musk said on Twitter in July.

The Indian market for premium EVs is still in its infancy and there is a shortage of charging infrastructure. Of the 2.4 million cars sold in India last year, only 5,000 were electric cars.

One government official said that lowering Tesla’s limited time obligations to pave the way for entry would attract more investment while at the same time “creating an Indian investor-friendly image and eco-friendly credit. It can be “enhanced”.

Tesla is urging Modi’s office in India to cut taxes before entering the market-sources

Source link Tesla is urging Modi’s office in India to cut taxes before entering the market-sources

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