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Indian Government Rejects Tesla’s Request To Decrease Import Duties On Electric Vehicles
shayma shamim
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Published on 4th Aug 21

Indian Government Rejects Tesla’s Request To Decrease Import Duties On Electric Vehicles

Tesla is continuously chasing the government to cut taxes, but it seems like India has no plans to levy tariffs on electric vehicles by Tesla. According to a Bloomberg report, Tesla has contacted the Ministry of Transportation and corporate and asked them to lower taxes on electric vehicle imports from the current 60-100% to 40%. The Ministry of Heavy Industry cleared that they will not consider such a proposal. Deputy Foreign Minister Krishan Pal Gulger said on Monday that there is no plan to cut import duties and the department will make policies in the automotive industry instead of this. Tesla CEO Elon Musk has expressed interest in opening a factory in India after the company began selling wholly-built vehicles made abroad.


However, the minister said the government has taken all steps to encourage the use of electric vehicles. They are continuously working to reduce domestic taxes and increase the number of charging stations across the country including rural areas. The minister's response started a controversy between India's efforts to boost local production and Tesla, which persuaded them to import cars at lower prices before building a factory in the country.

Billionaire Musk has expressed an interest in joining one of the world's growing auto industries, but Tesla cars will be unaffordable according to him because of the high prices, and these rules won't allow the company to get in. He complained that the high duties on imported cars restrict Tesla's entry into the Indian Market. Tesla aims to enter Asia's third-largest economy, where the usage of electric vehicles is less than 1% as compared to annual car sales, and about 5% when compared to one of the leading EV users geographies i.e., China.

Unlike China, where Tesla opened its first factory outside the US and took control of electric vehicle sales, a lack of costs and expensive infrastructure is hampering the widespread adoption of electric vehicles in India. Because of these obstacles, Maruti Suzuki India, the largest local automaker, is dissatisfied with the popularity of electric vehicles in India.

Maruti’s chairman speaks up about the low popularity of EVs in India

Maruti chairman RC Bhargava said that the technology available in India today makes the cost of an electric car much higher than the cost of a traditional car. This, combined with the lack of cost infrastructure, makes it very difficult to sell electric vehicles to people who are only interested in budget cars. He further added that only 5% of the cars sold in India are sold for more than Rs 1.5 million ($20,169) which is a disappointing figure. With per capita revenues of just $2,000 which is 5% of Europe and Japan, EVs are more expensive than most consumers' affordable prices.


If roads in poor countries are not cleared, global warming will not fall below dangerous levels, even as developed countries plan to shut down combustion engines in response to climate change. Most EVs are sold in the US, China, and Europe, and incentives and infrastructure investments supported by these countries help customers to switch from conventional cars to Electric vehicles.

Bhargava said Maruti will focus on developing hybrid models, developing transportation technologies using compressed natural gas, and exploring biofuels to achieve net-zero emissions. He thinks that using hydrogen is also a potential alternative and special attention should be paid to decrease the dependency on lithium which is majorly imported from overseas.

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