Hyundai India Pitches For Import Duty Cut On Electric Vehicles
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Hyundai India Pitches For Import Duty Cut On Electric Vehicles

Hyundai Motor India Ltd. (HMIL), which opened its new mammoth corporate office in Haryana state Gurugram on Tuesday, has advocated for lower import duties on electric vehicles (EVs). Hyundai, the second-largest carmaker in India, said on Tuesday following Tesla CEO Elon Musk's request for a tax reduction on imported electric vehicles, that any such duty reduction by the Centre would be highly advantageous to automakers in generating volumes and reaching feasible scale.

The South Korean automaker stated that any duty rate reduction by the Centre on imported EVs would be advantageous since it would assist vehicle makers in creating necessary volumes and achieve some semblance of viability.

Hyundai also backed the demand made by Tesla, the American electric vehicle manufacturer, for lower tariffs on imported EVs.

Hyundai has established its corporate headquarters in the millennium city that is the home of archrival Maruti Suzuki, with a Rs 2,000 crore investment plan. The business also showed its Loniq 5 EV but did not confirm intentions to market the car in India present. “Tesla, the American electric vehicle manufacturer, has requested a tariff reduction on CBU imports. It would be tremendously advantageous for OEMs in terms of gaining economies of scale in this highly competitive segment,” Seon Seob Kim, MD and CEO of Hyundai Motor India, said reporters at the opening of the company new Rs 1,000-crore corporate headquarters in Gurugram.

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What did Seon Seob Kim, CEO of Hyundai Motor India, say by supporting the request to lower EV tariffs?

Supporting the request of Tesla for lower EV tariffs, he stated that EV imports help build a receptive market in the nation until firms are ready to localise EV components and other infrastructure.

Hyundai, which aims to deliver its second EV model, the Ioniq, to the nation, offers the Kona Electric SUV. Currently, automobiles imported as fully built units (CBUs) are subject to customs duties ranging from 60% to 100%, depending on engine size and cost, insurance, and freight (CIF) worthless or greater than $40,000.

Hyundai stated that government support in the form of taxes and the development of nationwide charging infrastructure were the two most important drivers in the growth of the EV market in India.

What are the views of Tesla Chief Executive Officer Elon Musk?

Elon Musk, CEO of Tesla, stated last week that the firm might establish a manufacturing plant in India if it first succeeds with imported automobiles. However, he claims that import taxes of India are currently "the highest in the world," and he hopes for "at least temporary tariff reduction for electric vehicles."

In a tweet, Bhav-ish Aggarwal, co-founder of Ola, which is about to debut its Ola Electric scooter, stated, "Strongly disagree with both." Let us have faith in our capacity to manufacture locally while also attracting global OEMs to build in India rather than merely import. We are not the first to do so.”

Musk responded on Twitter to fans who urged him to introduce Tesla vehicles in India, saying, "We want to do so, but import tariffs are by far the worst in the world of any big nation!" "Clean energy cars are regarded the same as diesel or gasoline," Musk added, "which does not seem fully compatible with climate of India aims."

On the other hand, He stated, "We are hoping that electric vehicles would receive at least temporary tariff reduction that would appreciate." When asked if Tesla might begin local assembly in India, Musk responded, "If Tesla can thrive with imported automobiles, then a plant in India is pretty likely."

Views by Korean-American car designer

Kim noted that while the domestic market is ready for electric two- and three-wheelers, four-wheelers may take some time to gain traction. “It will take time for OEMs to localise EVs. We are developing low-cost mass-market EVs in India unless the government allows duty reductions on imported CBUs, it would be tremendously beneficial for all of us to generate market demand and scale,” Kim explained.

"More government help in the form of tax cuts and incentives is required. Based on our experience in other global markets, such as South Korea, China, and certain European countries, we know that charging infrastructure remains a source of worry in India", he further said.

According to him, range anxiety is the main issue for customers. Kim stated that to make EVs more accessible, the government can give subsidies to private consumers through the FAME plan.

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