Elon Musk has once again spoken about making a low-cost Tesla in India. In a virtual address to a business forum meet during the ongoing G-20 summit in Indonesia, the Tesla chief executive and the world’s richest man said he was considering a proposal to make a cheaper Tesla model for markets like India and Indonesia.
“We do think that making a much more affordable vehicle would make a lot of sense and we should do something,” he said.
But India rejected Elon Musk’s request for a tax rebate on Tesla’s electric cars early this year citing enough participation from global automakers within the existing framework.
Central Board of Indirect Taxes and Customs chairman Vivek Johri was quoted as saying that, “we looked at whether the duties need to be rejigged, but some domestic production is happening and some investments have come in with the current tariff structure. So, it is clear that this is not a hindrance”.
Johri further added that the company had not yet presented a plan for local manufacturing and procurement from India.
Musk has been at loggerheads with the Centre over a slew of issues ranging from the setting up of a local factory to the country’s high import duties.
Tesla has been lobbying the government to slash import taxes on electric vehicles before it enters the market.
The government, meanwhile, appears adamant saying that the automaker should produce in India rather than assemble completely knocked down (CKD) parts.
The other bone of contention appears to be high import duty. India at present imposes 100 per cent duty on fully imported cars with a Cost, Insurance, and Freight (CIF) value of more than $40,000 and 60 per cent on cars whose CIF value is less than the amount.
The veiled clarification by the Centre comes at a time Opposition ruled states are rolling out the red carpet for the Tesla boss asking him to manufacture the much sought-after EV in their states.
It all began in January after Musk tweeted that his company “was still working through with a lot of challenges from the government (Centre)”.
In response, ministers from Telangana to Punjab and Bengal to Maharashtra invited him to invest in their states.
The Tesla boss is known for his outbursts on Twitter and has been vocal about issues related to reducing import duty on imported EV cars.
According to reports, previously Musk also sought a meeting with Prime Minister Narendra Modi to lobby for slashing import duties.
The government is apprehensive of any tax break to the EV automaker as it could discourage other auto manufacturers.
Add to that, any such move could adversely affect local manufacturers who lag behind Tesla in terms of financial might and technical expertise.
