India will low down importing duty of electric vehicles

According to foreign media reports, two Indian government officials revealed that the country is considering drastically lowering the import tariffs on electric vehicles to a minimum of 40%. Not long ago, Tesla called on India to lower tariffs.

Indian government officials revealed that the government is discussing reducing the tax rate from the current 60% to 40% for imported electric vehicles worth less than US$40,000 (including car costs, insurance and freight). For electric vehicles worth more than US$40,000, the government is considering lowering the tax rate from 100% to 60%. An official said: "We have not finalized the tariff reduction, but it is currently being discussed."

India is the world's fifth-largest car market, with annual sales of about 3 million vehicles, but most of the cars sell for less than US$20,000. It is estimated that electric vehicles account for only a small part of India's total sales, and the sales of high-end electric vehicles are not worth mentioning.

Previously, Tesla told the Indian government that reducing the import tariff on electric vehicles to 40% would lower the final price of the vehicle and increase sales. Tesla’s proposal has triggered a rare public debate among Indian car companies. The center of the debate is whether lowering tariffs will contradict India’s efforts to develop domestic manufacturing.

Nevertheless, if companies such as Tesla can bring benefits to India's domestic economy, such as producing cars locally, the government tends to cut tariffs on imported electric cars. The government official said: "Reducing import tariffs is not a problem, because India does not import many electric vehicles. But we need to get some economic benefits from it, and we must also balance the concerns of domestic manufacturers."

Last month, Tesla CEO Elon Musk said on Twitter that if its imported cars can succeed in India, then Tesla is “very likely” to build a plant in India, but now imported cars The tariffs are too high.

Another Indian government official said that the tariff cuts are only for electric vehicles and not for other types of cars. Therefore, domestic automakers need not worry. Indian domestic automakers mainly produce lower-priced gasoline-powered models. .

The official also revealed that the Indian Ministry of Finance and Ministry of Commerce, as well as the National Institute of India, a federal think tank chaired by Prime Minister Narendra Modi, are discussing the proposal and will consult all stakeholders. . The Ministry of Finance, the Ministry of Commerce and the National Research Institute of India did not immediately comment.

For many years, foreign high-end automakers, including Daimler, Mercedes-Benz and Audi, have called for India to reduce tariffs, but they have faced strong resistance from Indian automakers. Therefore, India's luxury car market is still small, with an average annual sales volume of only about 35,000 vehicles.

This time, Tesla's proposal has won the support of Mercedes and South Korean car company Hyundai, which occupies about 18% of the Indian car market. But Tata Motors and Ola, who had been invested by SoftBank, opposed Tesla's proposal. Tata produces low-cost electric cars in India, while Ola produces electric scooters in the country.

Another person familiar with the government's thinking revealed that people are beginning to realize that brands like Tesla can increase the popularity of electric vehicles in the Indian market. In terms of electric vehicle sales, India is far behind other major cars. market. The Indian government is currently considering the best solution to this problem, and they also hope that Tesla can bring some benefits to the country, such as building a factory in the country or purchasing parts and components in the country.

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