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Tesla can benefit from manufacturing electric cars in India, Gadkari says

The Union’s Minister for Road Transport and Motorways, Nitin Gadkari, said on Monday that if US-based electric car maker Tesla manufactures its electric vehicles in India, the company will also benefit.

Gadkari spoke about an event here and said the days are not very long where the prices of all electric vehicles will be less than the price of petrol vehicles in the country.

” Agar Tesla India me electric car manufacturing karega toh unka bhi fayda hoga (If Tesla manufactures its electric vehicles in India, they will also get benefits), ” he said.

Earlier on April 26, Gadkari had said that if Tesla is ready to manufacture its electric cars in India, then there is ‘no problem’, but the company is not allowed to import cars from China.

” If Elon Musk (Tesla CEO) is ready to manufacture in India, then there is no problem … Come to India, start manufacturing, India is a big market they can export from India, ” he said at an interactive session on Raisina Dialogue.

Last year, the Ministry of Heavy Industry had also asked Tesla to first start manufacturing its iconic electric vehicles in India before any tax breaks can be considered.

At present, cars imported as Completely Built Units (CBUs) are subject to tariffs ranging from 60-100 percent, depending on engine size and price, insurance and freight (CIF) value below or above $ 40,000.

Last year, the US company stated in a letter to the Ministry of Roads that the effective import duty of 110 percent on vehicles with a customs value above USD 40,000 is “prohibitive” for zero-emission vehicles.

It had asked the government to standardize the tariff on electric cars to 40 per cent. regardless of the customs value and abolish the social supplement of 10 per cent. on electric cars.

It had stated that these changes would boost the development of the Indian EV ecosystem and the company would make significant direct investments in sales, service and charging infrastructure; and significantly increase procurement from India for its global activities.

The company had argued that these proposals would have no negative impact on the Indian car market as no Indian original equipment manufacturer currently produces a car (EV or Internal Combustion Engine) with an ex works price of over USD 40,000 (approximately Rs 30.6 lakh ), and only 1-2 percent of the cars sold in India (EV or ICE) have ex factory / customs value over USD 40,000.

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