The long wait for entry of Tesla cars may be over as the Indian government is reportedly working on a new electric vehicle policy reducing import duty on imported cars. According to a report by Reuters, officials in the Modi government have said that the new policy could allow automobile companies to import fully-built electric cars to be imported at just 15% import duty, provided the companies promise investment in domestic manufacturing.
The report also claims that the proposal was made by Tesla, and that the govt is considering the same. “There is an understanding with Tesla’s proposal and government is showing interest,” Reuters quoted an official, saying that the official is familiar with the issue.
The import duty on fully-built cars at present is 100% for cars costing over $40,000, while it is 70% for the rest. This high tax makes imported cars prohibitively expensive. The price of the cheapest Tesla car, the Model Y, starts at $47,740 in the US, which means all Tesla cars arrack 100% import duty if imported as fully built.
As per automobile websites, the price of Model Y is Rs 50 lakh in India, while Model S costs Rs 1.5 crore and Model X costs Rs 2 crore. Model 3 is slightly costlier than Model Y at Rs 60 lakh. However, if the report is correct and the govt indeed slashes the import duty to 15% against the promise of starting domestic manufacturing, Tesla and other cars not currently made in India will become much cheaper in the country, provided the automakers commit to starting Indian manufacturing of such cars.
The long wait for entry of Tesla cars may be over as the Indian government is reportedly working on a new electric vehicle policy reducing import duty on imported cars. According to a report by Reuters, officials in the Modi government have said that the new policy could allow automobile companies to import fully-built electric cars to be imported at just 15% import duty, provided the companies promise investment in domestic manufacturing.
The report also claims that the proposal was made by Tesla, and that the govt is considering the same. “There is an understanding with Tesla’s proposal and government is showing interest,” Reuters quoted an official, saying that the official is familiar with the issue.
The import duty on fully-built cars at present is 100% for cars costing over $40,000, while it is 70% for the rest. This high tax makes imported cars prohibitively expensive. The price of the cheapest Tesla car, the Model Y, starts at $47,740 in the US, which means all Tesla cars arrack 100% import duty if imported as fully built.
As per automobile websites, the price of Model Y is Rs 50 lakh in India, while Model S costs Rs 1.5 crore and Model X costs Rs 2 crore. Model 3 is slightly costlier than Model Y at Rs 60 lakh. However, if the report is correct and the govt indeed slashes the import duty to 15% against the promise of starting domestic manufacturing, Tesla and other cars not currently made in India will become much cheaper in the country, provided the automakers commit to starting Indian manufacturing of such cars.