New Delhi: Tesla CEO Elon Musk’s plans to invest in India, particularly in the electric vehicle sector, is set to suffer as the Indian government made it clear that it is not considering any proposal to offer subsidies or exemptions for the import of electric vehicles into the country.
In a written reply to a query in the Lok Sabha, junior commerce and industries minister Som Parkash categorically stated that the Central government was not at present considering any proposal to offer subsidies or exemptions for import of electric vehicles. The minister’s reply followed a query if the government has any proposal to exempt Tesla or any other foreign carmaker from local value addition.
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Media were flooded with reports of Tesla’s investment plans in India after the company’s chief executive officer (CEO) Elon Musk had met Indian Prime Minister Narendra Modi in San Francisco in June this year. Reports claimed that Musk’s Tesla and the Indian government were on the same page about offering tax breaks to electric car makers to commit to manufacturing in India.
Tesla and the Indian government had at an impasse last year over tax relaxation on imported electric cars. The electric car maker wanted lower taxes to sell its cars manufactured elsewhere at competitive prices in India first, while the Modi government wanted Tesla to start manufacturing its cars locally.
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After the meeting with Modi, Musk had told reporters that he was confident of Tesla making its presence felt in India as soon as humanly possible. Reports said that Tesla was also willing to set up a factory for manufacturing electric cars in India only, if the government approves a concessional duty of 15% on imported vehicles in the initial two years of operations in India
Tesla’s market assessment suggested that India had strong potential for a sustainable energy future including solar power, stationary battery packs and electric vehicles. Musk had also earlier said that he hoped to bring SpaceX‘s Starlink satellite internet service to India.
