Sunday Tribune

Challenges stymie Tesla’s Ind ia plans

ELON Musk, who has been trying to launch Tesla in India for the past few years, is still haunted by the “key challenges” at the government’s end that have grounded his electric cars from running on domestic roads.

Despite repeated “come and manufacture/assemble your cars here” calls from the top ministers, Musk is “still working through a lot of challenges with the government”.

According to industry experts, the main challenge for Tesla to enter the Indian market is import duty.

With a $39 990 (about R612 000) price tag, the Tesla Model 3 may remain as an affordable model in the US but with import duties, it would become unaffordable in the Indian market.

Currently, India levies 100% tax on imported cars priced at more than $40 000 inclusive of insurance and shipping expenses, and cars less than $40 000 are subject to 60% import tax.

The government may consider lowering import duty along with offering other incentives to Tesla but for that, the EV major would have to invest in setting up a manufacturing facility in the country.

“This has been ongoing for the last few years. Tesla wants to sell completely finished products in India where the Indian government wants to bring complete knocked down (CKD) products initially and start assembling in India,” Soumen Mandal, a research analyst at Counterpoint Research.

Tesla wants to test the Indian market by importing cars before making any commitments for manufacturing.

In the current scenario, the Indian government is encouraging the Indian automotive industry through a performance-linked incentive (PLI) scheme and Tata Motors, Mahindra & Mahindra, Ola Electric, Hyundai and MG Motors have already started supporting domestic manufacturing.

Mercedes-benz is planning to launch India assembled flagship electric sedan, ‘EQS’ this year.

“The hesitation of Tesla in launching locally manufactured cars may affect it in getting early mover advantage,” said Mandal.

Tesla was testing Model 3 in the country last year.

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2022-01-16T08:00:00.0000000Z

2022-01-16T08:00:00.0000000Z

https://sundaytribune.pressreader.com/article/281745567751954

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