n n n ‘. concat(e. i18n. t(“search. voice. recognition_retry”),’n
By Aditi Shah and Aditya Kalra
NEW DELHI (Reuters) – Tata Motors is pressing Indian officials not to lower import taxes of 100% on electric vehicles and to protect domestic industry and its investors, as the government reviews Tesla’s plans to enter the market, people with direct knowledge said.
As India tries to boost domestic production and adoption of electric vehicles, Tesla is proposing to set up a factory in India, but it is not easy to reduce import taxes on electric cars.
India is implementing a new policy to import taxes on electric cars of up to 15% for corporations involved in some local manufacturing. The policy could allow Tesla to set up its factory in India to make its $24,000 car, while raising its maximum estimated models with reduced taxes.
Tesla’s strategy is a departure from its failed plan last year, when it forced India to reduce tariffs.
In meetings with Prime Minister Narendra Modi and other departments, Tata opposed the project, arguing that its investors had made their decisions on the assumption that the tax regime favoring locals would remain unchanged, two sources familiar with the negotiations said.
The offices of Tata and Modi responded to requests for comment.
Tata also argues that India’s EV players want more from the government in the early stages of the industry’s expansion phase, pointing to imported petrol or diesel cars that are still subject to taxes of up to one hundred percent even though the industry is well-developed, The first said the source.
“The tariff cut will affect the entire (domestic) industry,” the source said, adding that “the investment climate would be polluted. “
Tata, one of India’s largest automakers, shut down its EV business in 2019. Private equity corporation TPG and Abu Dhabi’s state-owned holding company ADQ invested $1 billion in 2021, valuing the EV business at around $9 billion, with the source at the time saying a relief. in price lists for foreigners. It’s possible that players are simply risking a long-term fundraiser.
India’s EV market is small, but 74% of the 72,000 EVs sold this year are made through Tata.
Tesla, which wastes percentage in a saturated U. S. market, is targeting the prospects of India’s auto market, one of the world’s largest, where more than 3 million cars are sold each year. Electric cars still account for a small percentage in India, however, the Modi government is selling the use of empty cars and the sector is developing rapidly.
Modi has been overseeing negotiations with Tesla since his meeting with CEO Elon Musk in New York in June.
The domestic car industry had lobbied hard against Tesla’s previous plan for India to lower taxes and succeeded, with a Tata Motors executive saying in late 2021 the move would run “contrary” to the government’s Make-in-India push.
THE OPINION OF THE GOVERNMENT OF INDIA
Another Indian player, Mahindra
Mahindra declined to comment.
New Delhi, the third source said, is seeking to assuage local automakers’ considerations, but India remains committed to facilitating access for foreign players into the EV sector to achieve its goals.
Modi wants 30% of annual car sales in India to be electric from 2030 compared to the current 2%. Charging infrastructure is in its infancy too.
“We will come out with a policy that addresses everyone’s fears,” said the official, adding one option was to lower import taxes only above a certain price point.
India’s existing one hundred percent import tax on electric cars applies to cars priced above $40,000, which applies to Tesla’s maximum models. Tata has 3 EV offerings, priced from $10,400 to $24,000.
“If India needs to be an EV hub, we need more manufacturers … Local industry need not fear that Tesla or anyone else will wipe them out,” said the Indian official.
The talks between India and Tesla come at a time when countries are courting the U. S. giant.
This week, Thailand’s prime minister said he had given a field trip to Tesla executives as they searched for land, saying he was confident the company would invest in the country.
(Reporting via Aditi Shah and Aditya Kalra; additional reporting via Shivangi Acharya; editing via Elaine Hardcastle)