Tesla’s Request For Reduction Of Import Tax Under Consideration

Reports online suggest that Tesla’s request for reduction of tax on imported vehicles is under consideration by the Indian government. This news comes after junior minister Krishan Pal Gurjar told the Parliament, “No such proposal is under consideration in the ministry of heavy industries.” 

The latest developments have been confirmed by two senior officials (who chose not to reveal their identities) to Reuters. Besides, the discussion is still in its early stages, so no definitive comments can be made. But if things go well, the Model 3, likely to be Tesla’s debut vehicle, could be launched at an aggressive price, far below the current Rs 60 lakh (ex-showroom) estimate. 

Tesla is also keen to set up a Giga factory in India as well. However, Tesla founder and CEO Elon Musk made it clear that the EV manufacturer will test the waters with fully imported models before plunging in with such a large investment. 

But a hindering factor for Tesla at present is the steep import taxes for both ICE and electric vehicles. Currently, vehicles costing above 40,000 dollars attract a 100 percent tax while vehicles costing below it are slapped with a 60 percent tax. This led Tesla to request the Indian government just some time back to reduce the import taxes to 40 percent on EVs, a move which was backed by Hyundai as well. 

So if the government decides to cut down import taxes on fully imported electric vehicles, chances are that EVs including Tesla Model 3, Audi e-tron, Mercedes-Benz EQC, and Jaguar I-Pace might become significantly more affordable. But let’s not get into speculation until the news has been confirmed.

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