Electric cars

Gadkari, Auto News, ET Auto

Tesla demanded a reduction in import duties on electric vehicles (EVs) in India.

Union Minister Nitin Gadkari said on Friday he had repeatedly called on US-based Tesla to manufacture its iconic electric vehicles in India, while assuring that all support would be provided by the government to business. Speaking to “India Today Conclave 2021,” Gadkari further said that electric cars made by Tata Motors are no worse than electric cars made by Tesla.

“I told Tesla not to sell electric cars in India that your company made in China. You should make electric cars in India and also export cars from India,” he said.

Tesla demanded a reduction in import duties on electric vehicles (EVs) in India.

“Whatever support you (Tesla) want will be provided by our government,” Gadkari added.

The Minister of Road Transport and Highways said he was still in dialogue with Tesla officials regarding the company’s request for tax breaks.

Last month, the Heavy Industries Ministry also asked Tesla to start manufacturing its iconic electric vehicles in India before tax breaks could be considered.

At present, cars imported as fully built units (CBUs) are subject to tariffs ranging from 60 to 100%, depending on the size and cost of the engine, the value of the insurance and the freight (CIF) less than or greater than 40,000 USD.

In a letter to the Highways Department, the US firm said the effective import tariff of 110 percent on vehicles with a customs value over US $ 40,000 is “prohibitive” for zero-emission vehicles.

He called on the government to standardize the tariff on electric cars to 40 percent regardless of customs value, and to remove the 10 percent social surcharge on electric cars. He said these changes will boost the development of India’s electric vehicle ecosystem and the company will make significant direct investments in sales, services and charging infrastructure; and dramatically increase India’s purchases for its global operations.

The company argued that these proposals would have no negative impact on the Indian automotive market, as no Indian OEM is currently producing a car (EV or ICE) with an ex-factory price above $ 40,000 and only 1 to 2 % of cars sold in India (EV or ICE) have an ex-works / customs value above 40,000 USD.

Recently, Gadkari had said that Tesla had a golden opportunity to locate its manufacturing plant in India given the country’s push on electric vehicles.

Tesla is already sourcing various auto components from Indian automakers and setting up a base here would be economically viable for that, he said.

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Tesla is joining Oracle, HP and Toyota Motor in moving the US headquarters to Texas from California, which has relatively high taxes and living costs. While Silicon Valley is also a hive of development for new ideas and businesses, Texas is known for its cheaper labor and less stringent regulations.

The country has been a global leader in the switch to electric vehicles and seeks to become the first to end the sale of gasoline and diesel engines by 2025.


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