The relationship between the world’s largest electric carmaker, Tesla Inc., and India has become a little sour over the last few years. The company was considering bringing its cars to the country and requesting the government to reduce import taxes. However, the Indian government continuously denied this request. It has now been reported that after abandoning the lobbying talks for a while, some high-level executives from the American EV carmaker will be visiting the country to have a meeting with the officials of the Indian government. The goal of the meeting is to find ways in which the company can deepen its supply chain in India and diversify from China.
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As of yet, the topics of discussion in this meeting between the senior Tesla executives and officials from Prime Minister Narendra Modi’s office have not been publicized, as the meeting will be private in nature. However, sources close to the situation have reported that the company plans to discuss ways to source local products that can be used in the process of manufacturing its high-end electric cars, such as the Model S, Model 3, Model X, and Model Y.
Expected attendees include C-suite executives and managers from the supply chain, production, and business development departments of Tesla, based in Austin, Texas. According to the sources, the executives plan to restate Tesla’s demand that India lower import duties on its cars.
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For those unaware, Tesla Inc. has been urging the Indian government to decrease the heavy import charges on EVs since 2019, as previously reported on Cartoq. However, the Indian government has been resolute in not doing so. In India, EVs costing less than USD 40,000 are now subject to a 60% import duty. Electric vehicles costing more than USD 40,000, on the other hand, are subject to a 100 percent import charge. The same issue applies to automobiles with internal combustion engines that are brought into the nation. Along with Tesla, it was also claimed that Audi lobbied the Indian government to lower the high tariffs.
The American EV maker even appointed a dedicated official to direct Tesla’s lobbying campaign in India. However, after the government reluctantly ignored Tesla’s request, the company asked its Indian team to work on commencing operations in the Middle Eastern and larger Asia-Pacific (APAC) markets. As a result, Manuj Khurana, policy and business development executive at Tesla in India, quit his job.
For more than a year, Khurana lobbied the Indian government to reduce the import duty on electric vehicles from as high as 100% to 40%. He claimed that this would allow Tesla to test the market with imports from its manufacturing centers like China before investing in a plant. However, Prime Minister Narendra Modi’s administration asked that Tesla first commits to producing cars in India before making any concessions. As a result, Tesla placed its ambitions to sell vehicles in India on hold, transferred members of its domestic staff, and abandoned its hunt for showroom space due to the standstill in discussions.
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