Auto & Transportation

According to a Reuters report, on August 9, local time, two senior officials of the Indian government confirmed to the media that India is considering a substantial reduction in import tariffs on electric vehicles to 40%.

The two government officials said that for imported electric vehicles worth less than US$40,000 (including the cost of the car, insurance and freight), the Indian government is discussing a substantial reduction in the tax rate from the current 60% to 40%. For electric vehicles worth more than US$40,000, the Indian government is considering reducing the tax rate from 100% to 60%. One of the officials also emphasized: "We have not finalized the issue of tariff reduction, but relevant discussions are currently ongoing."

Earlier, Tesla CEO Elon Musk expressed regret about India’s restrictive policies. Musk said on Twitter that although Tesla hopes to produce cars in India, “India’s import tariffs are by far the world’s The highest of any major country in China.” Musk added that clean energy vehicles should be “treated like diesel or gasoline vehicles.” If Tesla can succeed in importing cars from India, then it is very likely to build a plant in India. Tesla previously stated that it plans to import and sell Tesla's Model 3 electric vehicles in the Indian market, with a price of less than $40,000.

Indian Transport Minister Nitin Gadkari said in an interview with Reuters that if Tesla considers investing in production in India, the Indian government can provide various preferential measures to ensure that Tesla’s production costs in India are the lowest in the world. . At present, Tesla has established a company in Bangalore, the technological center of India, recruiting dozens of employees and conducting market research. For Tesla, which has decided to enter the Indian market, it is impossible for India's high import tariffs to not be considered.

According to foreign media reports, before Tesla, many other luxury car manufacturers have also lobbied the Indian government to reduce car import taxes in the past. For many years, foreign high-end automakers, including Daimler, Mercedes-Benz and Audi, have called for India to reduce tariffs, but they have faced strong resistance from Indian automakers and failed.

India is currently the world's fifth largest car market, with annual car sales of approximately 3 million vehicles, most of which are priced below US$20,000. According to industry estimates, electric vehicles account for only a small part of its total sales, and sales of luxury electric vehicles are even more insignificant.

Earlier, a consulting agency said that India has surpassed Germany to become the world's fourth-largest auto market, but in terms of sales in June, India still lags behind Germany. McKinsey also predicted that India will surpass Japan to become the world's third largest auto market in 2021, but from the perspective of sales in the first half of 2021 (monthly sales generally do not exceed 300,000 vehicles), it is difficult to achieve this goal.