Elon Musk is seeking temporary relief from import duties to gain Tesla a foothold in the Indian market
Tesla CEO Elon Musk has said he is discussions with India in the hopes of a cheaper way of selling imported electric cars in India, the world’s fourth largest EV market.
According to a recent conversation on Twitter, musk is currently seeking temporary ways around some of India’s materials and import laws, until the company can set up shop in the country properly.
In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built
— Elon Musk (@elonmusk) June 14, 2017
In February Musk had tweeted that he hoped that Tesla would enter the Indian market in the summer of 2017, however it would seem that that optimism is fading.
Nothing firm has been announced since April 2016, when Tesla announced plans to enter India with the Model 3 during 2017.
India imposes a 60% customs duty on imported EVs costing less than US$40,000, according to local media. But if a car is assembled in India, the customs duty is 10% – an incentive for automakers to set up factories locally. Musk had also previously noted concerns that even once manufacturing in India, there must be a 30% local content mix for parts – although the government reached out via Twitter to clarify that this was not the case.
Tesla’s mass-market Model 3 has a base price of $35,000, ironically meaning the affordable car could well be an unaffordable proposition were it to be exported for sale in India.
Yet even Tesla rivals are keen for Musk’s firm to make it:
Time you got out here Elon. You don't want to leave that whole market to Mahindra do you?? The more the merrier–and greener..! https://t.co/IPoA9viDRN
— anand mahindra (@anandmahindra) June 2, 2017
With India contemplating incredibly ambitious EV targets, it is not an opportunity Tesla or Musk will miss. In turn, the Indian government’s focus on its flagship “Make in India” policy means it is unlikely to turn down the opportunity of a home-grown Gigafactory.
Tesla will certainly make it to India sooner or later, and ElecTrans is optimistic that an agreement will be reached. How soon will be dependent on the success of current talks.