INDIA – H. D. Kumaraswamy, Minister of Heavy Industries and Public Enterprises of India, stated on Monday that Musk-owned EV giant Tesla is not interested in producing electric vehicles in India.
This statement comes as India issues a new EV policy to increase foreign investments by making considerable import tax reductions for automakers committing to domestic production.
India’s Policy to attract Tesla
India made its EV policy specially aimed to attract the EV giant to establish its production unit in India. The newly released policy offers a reduced import tax of 15% from the standard 70%, but for a limited number of vehicles. This policy requires that companies invest at least $500 million in domestic production and commence operations within 3 years.
According to the Indian Government Press Release, producers are required to meet certain domestic content thresholds, making 25% local manufacturing by the third year and 50% by the fifth year. A maximum of 8000 cars can be imported by the approved companies. The company can use the unused limit in the next year if it imports fewer than 8000 cars.
Despite all these tactics and efforts, the Indian government failed to bring a Tesla manufacturing unit to the country. For the first time, the Indian government accepts its failure in front of the public.
However, reports say that Tesla is looking to import EVs from its Berlin Factory to India.
Musk commented that tariffs on imported vehicles are too high in India.
Indian Minister HD Kumaraswamy confirmed that Tesla will open two showrooms in the country.
What’s the aim of India?
India wants to promote the share of EVs in the car market through local manufacturing. The government aims to create jobs and reduce export dependency through domestic production.
However, other EV manufacturers like Mercedes-Benz, Volkswagen, Hyundai, and Kia have shown interest in establishing their production units in India.
But India failed to achieve its main goal, which was to attract Tesla, as experts say that India’s EV market is not mature enough for Tesla’s local production.
