Tesla remains silent and yet to communicate its India plans, says official

Interestingly, this development comes after Tesla CEO Elon Musk, who was scheduled to visit India on April 21-22 this year, had postponed his visit at the last moment citing very heavy Tesla obligations. This was after he confirmed his visit to India in early April 2024, through a post on X saying, “Looking forward to meeting with Prime Minister @NarendraModi in India”. However, he made a surprise visit to China immediately after postponing his India visit.

Speaking on the automaker’s India strategy, the government official reportedly said that the EV policy was always meant for everybody. “They (Tesla) are just silent. The EV policy was always meant for everybody,” the official said when asked whether the company has communicated its plans to the government. He also reportedly added that the commercial decisions are announced by the companies.

In June 2023, Musk met with Prime Minister Narendra Modi during the latter’s US visit and stated that the company planned to visit India in 2024 while expressing confidence that Tesla would enter the Indian market soon. Musk’s proposed visit had raised expectations that he would announce plans for Tesla to set up business in the country.

It was expected that the Tesla CEO would announce plans for the automaker to set up its manufacturing unit in India and investments for the same that could be billions of dollars and the way forward for selling Tesla electric cars in India at the earliest. Musk had in the past called for import duty reduction in India to be able to sell Tesla electric cars in the country.

His planned visit to India came weeks after the government announced a new electric vehicle policy under which import duty concessions would be given to companies setting up manufacturing units in the country with a minimum investment of $500 million, a move aimed at attracting major global players like Tesla.

Incidentally, in March 2024, the Indian government announced a revised EV policy, under which, the auto companies that would set up manufacturing facilities for electric passenger cars in the country will be allowed to import a limited number of cars at lower customs or import duty of 15 per cent on vehicles costing $35,000 and above for five years from the date of issuance of the approval letter by the government.

Currently, cars imported as completely built units (CBUs) to India attract customs duty ranging from 70 per cent to 100 per cent, depending on the engine size and cost, insurance and freight (CIF) value. CBUs whose CIF value is more than $40,000 attract a 100 per cent import duty (for petrol engines size more than 3,000 cc and diesel engines of size more than 2,500 cc). Whereas those with CIF value under $40,000 attract 70 per cent duty (for petrol engine sizes under 3,000 cc and diesel engine sizes under 2,500 cc).

First Published Date: 19 May 2024, 10:12 AM IST