The Indian government is reportedly reviewing a request from Tesla, led by Elon Musk, to reduce tariffs on imported electric vehicles (EVs).
As Tesla explores the possibility of establishing a manufacturing plant in the country, the company has sought an initial tariff concession. This appeal aims to offset India's high customs duties, which currently stand at 70% for cars priced under $40,000 and 100% for cars exceeding $40,000, as per sources cited by the Financial Times.
The outcome of this request could influence Tesla's strategy and potential investment in the Indian market.
"Their view has always been that they need some tariff concessions at least in the interim period. It would have some kind of sunset clause," one of the officials was quoted as saying.
Tesla has reportedly requested the tariff concession as a prerequisite for building a manufacturing plant in India. The proposed reduced tariffs would not be exclusive to Tesla but would apply to all electric vehicle (EV) manufacturers.
Officials familiar with the matter have indicated that the considered reduced rate is 15% for EVs across all price ranges. However, it's emphasized that the government has yet to finalize the policy, and discussions on the matter are still ongoing.
This potential tariff adjustment reflects the broader efforts to incentivize and support the growth of the electric vehicle market in India.
"We want to create a package which is good for India and which doesn’t become a curated package for one company. Others are free to take advantage of this window, subject to meeting these kinds of requirements," one of the officials stated.
In September, reports surfaced indicating that Tesla was contemplating the construction of a battery storage factory in India. The company purportedly submitted a proposal to the Indian government outlining plans to bolster the country's battery storage capabilities, particularly with its 'Powerwall' technology. Tesla's proposal aligns with broader efforts to enhance energy storage infrastructure in India.
Elon Musk, Tesla's CEO, has expressed intentions to establish a Tesla supply chain in India. This move could potentially pave the way for increased production and availability of Tesla's products, including electric vehicles and energy storage solutions, in the Indian market. Tesla's endeavors in India signify the company's strategic interest in tapping into the country's growing market for electric vehicles and renewable energy solutions.
(With Agency Inputs)
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