Government Tells Tesla To Make EVs In India Before Asking For Tax Benefits: Report

The Indian Government has asked Elon Musk-owned Tesla to start manufacturing its electric vehicles in India before asking for any tax concessions. Citing government sources, PTI reported that the Heavy Industries Ministry wants the American EV maker to begin production in the country first before seeking any tax reliefs from the Indian government. The sources reportedly said that the Centre is not giving such benefits to any automaker, and providing such duty concessions to Tesla will not send a good message to other firms that have invested billions of dollars in India.

Also Read: Tesla Gets Approval For Testing Four Models In India​

Tesla has asked the Indian government for a reduction in import duties

The California-based maker had previously urged the Indian government to reduce import duties on EVs. In a letter to the Indian ministries, the company reportedly lobbied the Centre to reduce import taxes on fully assembled EVs to 40 per cent against 60 per cent for cars priced below $40,000 and 100 per cent for cars priced above $40,000.

Tesla CEO Elon Musk wants to bring its electric cars to India, but high import rates are pushing back its entry. In his earlier tweets, Elon Musk said that Tesla will consider opening a factory in India, if it finds success with imports.

Earlier, the government reduced the goods and services tax (GST) on EVs to 5 per cent from 12 per cent. Moreover, the GST on chargers and charging stations for EVs has been lowered from 18 per cent to 5 per cent, in a bid to boost electrification and encourage global EV manufacturers to set up operations in India.

The Model 3 is the most affordable Tesla and is likely to be the first one to launch in India

Last month, Tesla reportedly received approval for homologation of all four models, which are believed to be Model 3 and Model Y variants. Tesla is already testing its electric vehicles in India. The Model S has been spotted testing on several occasions. Interestingly, the Model Y was also recently captured on camera performing a road test.