Elon Musk Asked Not To Sell Made In China Cars In India By Modi Government

Elon Musk Asked Not To Sell Made In China Cars In India By Modi Government

Highlights:

  • Modi govt asks Tesla owned by Elon Musk to not sell China-made cars in India
  • Union Minister Nitin Gadkari compares EVs from Tata Motors to Tesla
  • Gadkari also assured that all support will be provided by the government to the Tesla.

On Friday, Union Minister Nitin Gadkari said that he had asked the US-based Electric Vehicle (EV) manufacturer Tesla several times to manufacture its iconic electric vehicles in India, while assuring that all necessary support will be provided by the government to the company.

While addressing the “India Today Conclave 2021”, Gadkari also said that the electric cars which are manufactured by Tata Motors are not less good than electric cars manufactured by its counterpart from the Unites States, Tesla.

Union Minister Gadkari said, “I have told Tesla that don’t sell electric cars in India which your company has manufactured in China.

“You should manufacture electric cars in India, and also export cars from India”.

 The US-based EV manufacturer has demanded a reduction in the import duties on electric vehicles in India.

Gadkari added, “Whatever support you (Tesla) want, will be provided by our government”.

The Union Minister for Road Transport & Highways said that he is still in talks with the officials from Tesla over the demands from the company related to tax concessions in India.      

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In September, the heavy industries ministry had also asked Tesla to first start manufacturing its iconic electric vehicles in India before any tax concessions on the imports can be considered.

As of now, the cars imported as Completely Built Units (CBUs) attract a customs duty which ranges between 60% to 100%, depending on engine size and Cost, Insurance and Freight (CIF) value less or above $ 40,000.   

Tesla, in a letter to the road ministry, had stated that the effective import tariff of 110% on vehicles with customs value above $ 40,000 is “prohibitive” to zero-emission vehicles.

The EV manufacturer has requested the Indian government to standardise the tariff on all the electric cars to 40% regardless of the customs value, and also withdraw the social welfare surcharge of 10% on electric cars.

The company states that such changes would boost the development of the Indian EV ecosystem and also the company will make significant direct investments in sales, service, and charging infrastructure; and significantly increase procurement from India for its global operations.

The company argued that these proposals would not have any negative impact on the Indian automotive market as no Indian Original Equipment Manufacturer (OEM) currently produces a car (EV or ICE) with ex-factory price above $ 40,000 and only 1% to 2% of cars sold in India (EV or ICE) have ex-factory/customs value above $ 40,000.             

Not so long ago, Union Minister Gadkari had said Tesla has a golden opportunity to set up its manufacturing facility in India given the country’s thrust on e-vehicles. 

Tesla is already sourcing various auto components from Indian automakers and setting up base here would be economically viable for it, he had said.

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Swastika Dubey

Swastika Dubey is a content writer who has a keen interest in politics, fashion, and lifestyle. She is a post-graduate in Economics and loves to listen to classic old Hindi songs and travel to new places in her leisure time. Her writing is well researched, covering important aspects and core of the topic covering crucial points.

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