Tesla’s attempt to break into Indian market emphasizes tariffs


TOKYO – As Tesla prepares to launch its electric cars in India, automakers around the world are watching how New Delhi reacts to the company’s pressure for lower tariffs and how this could impact their own strategies on the Indian market.

The world’s largest electric vehicle maker had obtained approval to sell four models in India at the end of August, according to the country’s transport authority website. Release dates and price tags have not been announced, but speculation suggests EVs will be available in the country by the end of the year.

Tesla co-founder and CEO Elon Musk predicts that initial sales in India will consist of imported vehicles. But since the American automaker launched a local unit in Bangalore, media have reported that Tesla also plans to produce in India.

“If Tesla is able to be successful with imported vehicles, then a plant in India is very likely,” Musk said on Twitter in late July, when asked about the possibility.

But while hinting at an Indian factory, which would give the country an economic boost, Musk also urged the Indian government to make concessions, especially on its high tariffs for electric vehicles, which are between 60% and 100%. %.

India’s “import duties are by far the highest in the world of any major country!” Musk tweeted, adding that Tesla “is hoping there will be at least temporary tariff relief for electric vehicles.”

Musk is likely hoping that lower tariffs and the resulting reduction in prices would help Tesla attract more early adopters and better gauge customer reaction to the Indian market. Greater adoption of electric vehicles would also encourage the construction of related infrastructure in India.

Tesla lobbied India to cut prices for electric vehicles, Reuters reports. New Delhi is believed to be undecided, with some reports in August saying the government had rejected the idea, and others saying it was exploring the option in return for Tesla to build a factory.

Modi’s “Make in India” campaign, designed to strengthen the manufacturing sector, has attracted foreign players as long as they increase local production. The fact that India is reducing prices for electric vehicles will likely impact the strategies of other foreign automakers in the country.

India is subsidizing electric cars, aiming to ensure that electric vehicles account for around 30% of all new vehicles sold in the country by 2030, up from less than 1% currently. Suzuki Motor, India’s largest passenger car seller, aims to launch electric vehicles there by 2025.

Prime Minister Narendra Modi is working on updating India’s electricity mix, which is mainly based on coal. Electric vehicles are essential to India’s high-tech and environmental goals, supported by increased use of renewable sources.

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