What’s delaying Tesla?

For three years, Tesla has been citing the same reason to not launch in India: high import duty.

Tesla wants India to charge 40% on fully-assembled EVs. At the current rate, it believes Tesla cars will remain unaffordable to Indians.

India imposes a 100% import duty on fully-imported cars costing over 29.7 lakh rupees ($40,000), including insurance and freight. Those that cost less attract 60% duty. As India considers Tesla’s proposal to lower the duty, CEO Elon Musk is seeking a meeting with prime minister Narendra Modi.

Tesla, meanwhile, has found support from other auto firms operating in India. Last month, the BMW India head said the government must reduce duties on EVs temporarily to help generate adequate volumes for automakers to start manufacturing locally.

The government, on the other hand, has asked Tesla to begin manufacturing in India first, after which it might allow some tax cuts. But nothing is finalised so far. On Dec. 5, Niti Aayog’s Amitabh Kant said a final call is due soon.

“That (Tesla’s request for a duty cut) is being studied by the government. All concerned ministries are examining the proposal,” Kant told The Economic Times.

In December 2020, transport minister Nitin Gadkari said Tesla is expected to debut in India in 2021. He suggested it will begin with sales and then move towards manufacturing and assembly, depending on the demand.

The company, however, has remained tight-lipped. It did not respond to Quartz’s earlier queries on the matter.

Will 2022 end the wait?

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