Trust local: Ola CEO strongly disagrees with Tesla, Hyundai on EV import duty
Even as the battle for the Indian electric vehicle market grows intense with time, there have been calls from industry giants like Tesla to lower import duties. However, Indian EV manufacturers say that would be a bad idea.
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FollowEven as the battle for the Indian electric vehicle market grows intense with time, there have been calls from industry giants like Tesla to lower import duties. However, Indian EV manufacturers say that would be a bad idea.
A few days ago, Tesla hit the headlines in India when a report by international news agency Reuters claimed that billionaire Elon Musk's firm wrote to Indian ministries seeking a significant reduction in import duties on electric vehicles.
Musk reportedly sweetened the deal with the possibility of setting up a factory in India if successful with imported vehicles.
Responding to Twitter followers, Musk said, "We want to launch in India, but import duties are the highest in the world by far. We hope there will be at least a temporary tariff relief for electric vehicles. That would be much appreciated."
Tesla's suggestion found support from South Korean carmaker Hyundai.
Hyundai Motor India MD and CEO SS Kim said that any duty rate cut by the government on imported electric vehicles would be beneficial as it would help automakers generate much-needed volumes and reach some viable scale.
However, Ola founder Bhavish Aggarwal has a different view on this debate.
Bhavish took to Twitter on Tuesday to strongly express his disagreement with the views of foreign EV makers.
Bhavish said that rather than just importing EVs, there is a need to have confidence in indigenous ability to build and attract global original equipment manufacturers to build in India.
We will not be the first country to do so, he said.
The government, too, at the point, is not keen on lowering import duties.
According to a report in Money Control, the Narendra Modi government has ruled out offering company-specific incentives.
The report also noted the Centre is not in favour of lowering import duties on completely built-up foreign cars and is keen on incentivising domestic manufacturers.
Data suggests that India currently charges 60% import duty on completely built-up cars costing less than $40,000 (Rs 29.7 lakh) and 100% import duty on cars costing over $40,000. Tesla models in India are expected to be above the $40,000 limit. Only the Model 3 Standard Range Plus is priced below that figure in the US.
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