Indian customers have been eagerly waiting for Tesla’s official debut in the country for quite some time now. There have been multiple developments in recent months that have hinted towards an imminent announcement. The Tesla Model 3 that was spotted testing in Maharashtra a while ago heightened the anticipation even further. However, the latest development hints towards the brand facing some speed breakers even before beginning its stint here. In today’s article, we will look at the problems that Tesla is facing in India and what is Elon Musk’s take on them. Let’s go.
Tesla problems in India
Replying to a question on Twitter recently, Elon Musk mentioned that import duties in India are considerably higher when compared to any other large country in the world. He even moved on to mention that clean energy vehicles are treated the same as other petrol and diesel vehicles in the country. According to the import rules, 60% tax would be levied on CBU cars with CIF (Cost, Insurance, Freight) value less than $40,000 (approximately Rs 30 lakh) and 100% tax would be levied on CBU cars with CIF value more than $40,000.
According to the above-mentioned criteria, the final cost after importing would increase the price tag of a car by quite a big margin. This would result in the brand (in this case, Tesla), failing to price its products competitively in the market. This would, in the long run, not be feasible for the brand as well as the prospective buyers. With that being said, there are only two ways out of this situation; either the government brings down the taxation norms or the brand sets up a factory in the country, which will, in turn, save the products from the high import taxes and will bring down the costs considerably. Musk, in another tweet, did mention that a Tesla India factory is in the plans, given the brand is able to succeed with imported vehicles.
The whole situation looks like a loop, the exit to which is in the hands of the company or the government or both. This situation could however delay the debut plans, which only time will reveal.
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