Tesla outlets likely to be in India soon as electric vehicle launch draws closer
Tesla, an electric car maker led by Elon Musk, is said to be in talks with the Indian government over setting up outlets in the country
In accordance with foreign direct investment (FDI) standards, foreign retailers with more than 51% FDI are required to source at least 30% of the value of goods purchased domestically
Development comes after four Tesla models pass homologation phase and are ready for launch in the country
India may soon see Tesla outlets in several cities as the leading electric vehicle (EV) automaker is in talks with the government about it. The electric car maker led by Elon Musk is said to be in talks with the government regarding the standards and regulations required for the US-based company to set up outlets in the country as it will have to comply with foreign direct investment (IDE ) as well as local procurement standards.
According to FDI standards, foreign retailers with more than 51% FDI are required to source at least 30% of the value of goods purchased domestically.
According to a commercial standard report, Tesla could source the components needed to manufacture its vehicle in the country. Earlier reports suggested that the electric vehicle maker was in talks with original equipment manufacturers (OEMs) for sourcing of parts such as flywheels, light weighing of forgings, among others. FDI rules allow a foreign company to include an agreement with a third party to meet mandatory local procurement standards.
The development comes after several reports suggested that All four of Tesla’s models have passed the homologation phase and are ready for domestic launch.
Initially, Tesla was looking to import its high-tech electric vehicle in the countryside. However, Musk, who boasts a 55 million Twitter follower tally, has publicly said India’s import tax on importing electric vehicles is the highest in the world. At the time, Musk, very active on Twitter, was responding to an Indian YouTuber who asked him when Tesla was launching its cars in the country.
In a response, Musk wrote, “We want to do it, but import duties are by far the highest in the world of any major country! Additionally, clean energy vehicles are treated the same as diesel or gasoline, which does not appear to be entirely in line with India’s climate targets. “
On the same day, responding to another Indian user, he said that if Tesla was successful in importing its cars to India, it would set up a factory in the country.
India currently imposes 100% import duty on fully imported cars with a CIF (cost and freight insurance) value greater than $ 40,000 and 60% on cars with a CIF value less than $ 40,000. . Subsequent reports have revealed that the central government is planning to give some breathing space to automakers who import vehicles from other countries.
Musk’s opinion on the Indian import tax was not well received by Indian Bhavish Aggarwal, who had launched his two electric scooters under Ola Electric. He said India should build electric vehicles locally. According to Inc42 Data Plus report, the market share of electric utility vehicles is expected to be $ 20 billion by 2030. The report points out that the country is expected to reach 28 million units by 2030.
At present, India holds just 0.5% of the global electric vehicle market. However, the growing popularity of two- and three-wheel electric vehicles is expected to accelerate the adoption of electric vehicles. Tesla’s entry into India as a commercial manufacturer of four-wheeled electric vehicles is expected to spark more interest in electric vehicles in the country. However, the cost of Tesla cars will play a crucial role in this.