Tesla planning to set up plant in India, urges government to reduce import duty

Musk made the statement in reply to a question from a Twitterati, as to when will Tesla launch in India

By:Updated: Jun 15, 2017 2:55 PM

Electric car giant Tesla is currently in talks with the government over reduction in import duty, company CEO Elon Musk has confirmed. By the time the talks go through, Tesla is also setting up a production plant in India. Musk had said earlier this year that Tesla would enter the Indian market with its products this summer, however the announcement has not materialised yet.

Musk made the statement in reply to a question from a Twitterati, as to when will Tesla launch in India. Musk responded saying: “In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built.”

Currently, the government imposes 60% customs duty on import of CBU (completely built unit) electric cars priced below $40,000, whereas the customs duty on CKD (completely knocked down) units is 10%. If the price of the unit being imported is over $40,000, the import duty is 100%.

Musk has lately expressed an increased interest in entering the Indian market with the electric car brand Tesla. Earlier this month, when the government announced the ambitious plan to have all electric cars on Indian roads by 2030, Musk was quick to respond saying: “India commits to sell only electric cars by 2030. It is already the largest market for solar power.”

Executive chairman of the group Mahindra & Mahindra, Anand Mahindra replied Musk’s tweet on a light note, inviting him to join in on meeting the target India has promised itself.

Last month, another Twitter user asked Musk if Tesla cars be introduced in India by 2017 or 2018, to which, Musk had tweeted saying: “Maybe I’m misinformed, but I was told that 30% of parts must be locally sourced, and the supply doesn’t yet exist in India to support that.”

Model 3 is Tesla’s most affordable car, which delivers a range of about 344 km per full charge. It is priced at $35,000 (which is about Rs 22.54 lakh) before incentives.

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