Electric Vehicles

Tesla will test Indian market with CBU launches, expects relaxation in taxes

Written by Nizam Shaikh

Tesla is planning to bring its range of electric vehicles to the Indian market. The brand has already registered an Indian subsidiary in Bengaluru. The company also plans to open up sales and service shops in Mumbai, Delhi and Bengaluru. Recently, reports suggested that the technology company is also planning to set up a manufacturing facility in India.

Tesla to Bring its Models Via CBU Route

But latest reports suggest that Tesla will first introduce its cars via the CBU (Completely Built-Up) route to evaluate the demand. If the brand finds its products successful in the Indian market, Tesla may proceed to either locally assemble the autonomous electric vehicles in the Indian market. The brand is also asking the Government of India to reduce the import duties on electric vehicles.

Temporary Tariff Relief

On the contrary, the Indian Government has increased import duties in a bid to promote local manufacturing and adopt locally-made electric vehicles. Other manufacturers have also reportedly tried to lobby the Government to reduce the import tariffs but faced opposition from domestic rivals. Tesla is hopeful that the Government will at least temporarily reduce the tax for electric vehicles.

Import Tax in India

Fully assembled cars attract 60% import duty in the Indian market. But fully assembled vehicles with a price tag of more than USD 40,000 is 100%. Tesla is pitching Niti-Aayog, the Indian Think Tank, to reduce the duties to 40% to help make electric cars affordable. After the demand picks up, the government can compel manufacturers to start local manufacturing. This will also help local vendors to gain business.

Tesla Model 3 – Price

The Tesla Model 3 is the only car in Tesla’s portfolio that is priced below just under the USD 40,000 mark. The Tesla Model 3 comes with a price tag of USD 39,990 MSRP. The price converts to approximately INR 30 lakh plus taxes, registration and import duties. Sources revealed that India’s transport minister Mr Nitin Gadkari would be offering incentives to Tesla to ensure the cost of production in India is less than in China. 

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