Tesla CEO Elon Musk has requested the Indian authorities to cut the high import duties on Electronic Vehicles(EV) to launch Tesla cars in India. Hyundai has come in support of Tesla for a temporary import duty cut for electric vehicles in India. The South Korean automobile giant feels that fewer import duties will boost electric vehicle adoption in India.
Tesla Appeals to Cut EV Import Duty
Elon Musk, Tesla CEO and founder, has appealed to the Indian authorities for a temporary cut in the electronic vehicles(EV) import duties. When asked about the Tesla manufacturing unit in India, Musk stated that the company is looking to establish itself first via EV imports. Once it is done, Tesla will go for a manufacturing unit in India.
Tesla’s CEO also informed that India has the highest import duty on EVs. An EV car has 60% to 100% import duty depending on engine size and cost, insurance, and freight (CIF) value less or above USD 40,000.
Tesla, the 5th largest firm among S&P 500, is hopeful that the Indian Government will consider its appeal for temporary import duty cut to strengthen the EV infrastructure in India.
Hyundai strongly supported Tesla’s demand to reduce import duty on EV cars. South Korean automaker further added that the Indian government should invest in EV charging infrastructure also to make India ready for electronic vehicles.
Hyundai Supports Tesla
Low excise duty and the strong EV charging infrastructure are the two major pillars to adopt EVs in India. Lower import duty will help the manufacturers to import a high volume of EVs in India while charging infrastructure will make things easy for the customers in adopting EVs.
In an official statement, Hyundai Motor India MD and CEO SS Kim said, “We have heard that Tesla is seeking some duty cut on imports of completely built units(CBUs). So that would be very helpful for the original equipment manufacturers(OEMs) to reach some economy of scale in this very price competitive segment.”
Answering a question related to the EV manufacturing unit in India, Kim said that It will take OEMs time to localize EVs by 100 percent. We are developing made in India affordable mass-market EV but at the same time if the government allows some reduction in the duty on imported CBUs that would be very helpful for all of us to create some market demand and reach some scale.
Currently, Hyundai is selling Kona Electric SUV in India. The South Korean automaker is also planning to launch Loniq EV in the local market. At the same time, Hyundai has plans to manufacture affordable Kona Electric SUV in India.
As per the Hyundai report, the Indian market is ready for two-wheelers and three-wheelers EVs. But, it will take time to establish manufacturing units in India for four-wheelers EVs due to high costs.
According to NITI Aayog and Rocky Mountain Institute (RMI), India’s EV sector will reach a valuation of US$ 50 billion by 2030. A report by India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026.
Ola Electric has already established the largest two-wheeler EV manufacturing unit in India. And the firm is also establishing the largest two-wheelers charging facility in India. But, there is minimal infrastructure in India for four-wheelers EV.
In February 2021, Karnataka CM Yediyurappa claimed that Tesla will set up a manufacturing unit in India. With latest statement from Elon Musk, manufacturing unit project looks like a dream. Now, the ball is in Indian government’s court to decide the future of EVs by providing less import duty. Till now, Indian officials did not comment anything on import duty issue.