Elon Musk's Tesla likely to begin India rollout through imported EVs: Report

Elon Musk-led Tesla is likely to enter the Indian market through direct imports, instead of committing to local manufacturing in the immediate future, Moneycontrol reported.

HT cannot independently verify this information.

The government is likely to prioritise integrating India into Tesla's global value chain rather than insisting on immediate local manufacturing commitments. The state may also offer further import duty relief, the Moneycontrol report added.

A senior government official added that Tesla is not yet ready to set up a manufacturing facility in the country. The company will begin importing vehicles and gradually increasing local procurement.

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Tesla will start making spares and sourcing some components locally. If even 10 per cent of Tesla's production starts being manufactured in India, it is a step forward, the report added.

According to the government, excluding EVs from the Indian market does not serve a purpose if they are not going to be manufactured domestically in the next 5-7 years.

Tesla has selected locations for two showrooms in the Indian cities of New Delhi and Mumbai, moving closer to its long-delayed plans to sell its electric cars in the country, Reuters reported.

The US carmaker has been hunting for showroom space in India since late last year to start sales in the world's third-biggest auto market, after putting market entry plans on hold in 2022.

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Govt considering lowering import duties

As mentioned earlier, the government is also considering lowering import duties for electric vehicles, along with a broader relaxation of import norms.

According to the report, basic customs duty on fully built EVs worth above $40,000 has been trimmed to 70 per cent.

An additional 40 per cent agriculture infrastructure and development cess (AIDC) has been introduced. The 10 percent Social Welfare Surcharge (SWS) has been exempted, resulting in an effective import duty of 110 percent for EVs above this price point. For EVs that cost less than $40,000, the import duty remains at 70 percent, the Moneycontrol report added.

Musk has long criticised India for having high import tariffs of around 100% on EVs. Tesla has repeatedly lobbied to relax them but has faced opposition from local automakers who think Tesla's entry could hit their EV plans, a Reuters report said.