Tesla May Benefit from EV Manufacturing in India: Gadkari

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Last year, the Heavy Industry Ministry also asked Tesla to first start manufacturing its iconic electric vehicles in India before considering tax breaks

Last year, the Heavy Industry Ministry also asked Tesla to first start manufacturing its iconic electric vehicles in India before considering tax breaks

Union Minister for Roads and Motorways Nitin Gadkari said on May 2 that if US-based electric vehicle (EV) maker Tesla manufactures its electric vehicles in India, then the company will benefit as well.

Speaking at an event, Mr Gadkari said the days are not far off when all electric vehicles will be priced below the cost of petrol vehicles in the country.

“Agar Tesla India me manufacturing electric cars karega toh unka bhi fayda hoga [If Tesla manufactures its electric vehicles in India then they will also get benefits],” he said.

Mr Gadkari had said on April 26 that if Tesla was willing to manufacture its electric vehicles in India then there was “no problem” but the company would not be allowed to import cars from China.

“If Elon Musk [Tesla CEO] ready to be made in India then there is no problem. Come to India, start production, India is a big market, you can export from India,” he said in an interactive session at the Raisina Dialogue.

Last year, the Heavy Industry Ministry also asked Tesla to first start manufacturing its iconic electric vehicles in India before considering tax breaks.

Currently, cars imported as Completely Built Units (CBUs) incur customs duties ranging from 60% to 100%, depending on engine size and cost, insurance and freight (CIF) value under or over $40,000.

Last year, in a letter to the Department of Transportation, the US company said the 110% effective import duty on vehicles valued over $40,000 was “unaffordable” for zero-emission vehicles.

She had called on the government to standardize the tariff for electric cars to 40%, regardless of the customs value, and to abolish the 10% social security surcharge on electric cars.

It had stated that these changes would fuel the development of India’s EV ecosystem and the company would make significant direct investments in sales, service and charging infrastructure; and significantly increase sourcing from India for its global operations.

The company had argued that these proposals would not have a negative impact on the Indian automotive market as no Indian OEM currently sells a car (EV or ICE) with a factory price above $40,000 (approx. Only 1-2% of cars sold in India ( EV or ICE) have a factory/customs value of over $40,000.

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