The American car maker Tesla is now entering Indian markets and is demanding to lower import duties. The reason comes with the fact that fully assembled EVs should be at a lower cost, being already imported, and should also be allowed to set up factories in India if success is found from the imports.
Hyundai Motor India, the second-largest car manufacturer in the country has backed Tesla stating that lowering taxes will help increase the volume of production and increase the popularity of electric vehicles.
This comes with the recent event from Hyundai Motor India, which had recently set up a factory in Gurugram and has backed Tesla’s statement.
The company stated that the only way EVs can attain growth in the Indian market is through Government support with significant investment for change in infrastructure and reduction in taxes.
The CEO of Hyundai Motor India, S S Kim, stated that since Tesla is seeking a reduction on import duties of CBUs, this would also benefit the manufacturers hit significant economic growth in this competitive market segment.
Kim further stated that it will take a while for the manufacturers to localise EVs by 100% and developing Indian-made vehicles will increase mass affordability. When the Government lowers the taxes on import duties on CBUs it would create market demand and target to hit a higher scale in the Automotive industry in the country.
This dates back to Tesla writing an official letter to the Indian Ministries requesting a reduction on import duties for fully assembled electric vehicles to 40%. The current import duty prices of cars priced below $40,000 are 60% and cars priced above $40,000 are 100%. The tax largely depends on the engine type and freight insurance.
Elon Musk had also stated in a tweet reply mentioning the import duties are highest from India and cleaner vehicle options like EVs should be considerably lesser than petrol and diesel vehicles as these vehicles do not deem fit for the country’s climate settings.
While 4WD EVs are yet to gain some momentum, Hyundai Motor India CEO SS Kim also stated that there is significant potential for 2-wheeler and 3-wheeler vehicles as well.
The only challenge automakers have to overcome is the investment in infrastructure which also directly impacts the customers’ choices with regard to charging stations for EVs.
SS Kim also voiced out concerns especially about charging infrastructures and that the government should invest in these for the future of EVs in the country. Since customers are mostly concerned about the range and the charging options, it would be of greater benefit if the government significantly invests.
Kim also holds on to the fact that with the correct incentives to the customers and also customer’s interest in the EV segment, the market can reach greater heights in a period of two years.
Until then, the government’s support for the EV segment of the Automobile Industry is highly crucial.
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