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According to people with direct knowledge of the matter, India is working on a new electric vehicle policy that will reduce the costs of some local generation electricity producers, following the proposal of Tesla (TSLA.O), which is considering entering the local market. . income.
Two of the sources said the law under review could allow manufacturers to bring all electric vehicles with a tax cut of as little as 15%, compared to the current 100% tax on small cars of more than $40,000 and 70% for the rest. . The report stated that an Indian government official was involved.
Tesla’s best-selling Model Y, for example, starts at $47,740 pre-tax in the United States. “People are aware of Tesla’s idea and the government has shown interest,” said an executive familiar with the matter.
Tesla and the Indian entity that developed the plan did not respond to requests for comment.
Asked about the move, Finance Minister Nirmala Sitharaman told reporters, “I don’t have any proposals before me” on reducing import duties on electric vehicles.
Such a policy, if adopted, could reduce the cost of delivering electric cars, something local automakers want to avoid. It could also open the door for global automakers other than Tesla to enter the world’s third-largest auto market, where electric vehicles account for less than 2% of all cars sold but are growing rapidly.
A third source said the lower tax could help Tesla sell all of its cars in India, not just the new cars it wants to produce locally.
TESLA’S NEW EV :
Other countries have taken similar steps to promote EV production contracts. Indonesia, for example, has offered to cut imports from 50% to zero for energy companies ready to invest in order to attract Chinese companies and Tesla.
Tesla makes its first attempt to enter India in 2021, forcing the authorities to reduce the import duty on electric cars by 100%. Talks between Tesla and the Indian government broke down last year after executives said the company should focus primarily on local production.
Tesla recently told Indian officials that it is willing to set up a local factory and produce a new electric car for the Indian market and for export that will cost around $24,000, about 25% cheaper than current entry models.
Rohan Patel, Tesla’s senior director of public policy and business development, met with executives in recent weeks. According to Reuters, Indian Prime Minister Narendra Modi met with CEO Elon Musk in June and watched the progress.
Indian officials said that there would be no special incentive for Tesla to enter the market, while Tesla’s low tax demand on production contracts made both sides happy. Tesla told Indian officials that the Indian company could be operating at full capacity by 2030, one of the sources said.
Tesla has a factory outside the USA in Shanghai, which is now the largest in the world, and a factory outside of Berlin.
The company is building a new factory in Mexico aimed at building a mass-market electric vehicle platform, and Musk said it will cut costs for customers.
