According to a recent update, when someone tweeted and asked Elon Musk, CEO of SpaceX about Tesla entering the Indian Market, he replied by emphasizing upon the extremely high import duties that also exist for the electric vehicles. According to Elon Musk, it may result in making the Tesla electric cars unaffordable for the market. The tweet was the result of previous multiple claims by the company of bringing Tesla cars in the Indian Market.
The company started its venture by launching small sports car called the Roadster and was succeeded by models like Model S and Model X. Tesla also unveiled its new launch namely Model 3 that was termed as a much affordable electric car. The launch of Model 3 was followed by conjectures of it entering the Indian Market
The trends are changing in India, given the shift towards electric vehicles. The Indian government is making numerous efforts to discourage carbon emission by vehicles. One of the main steps was the reduction in the GST rate on electric vehicles but still, these cars attract a huge amount of import duties.
If we try to dig deep into these provisions, a car priced higher than INR 27 lakh will be imposed with an import duty of 100%. Whereas, if the vehicle is priced lower than INR 27 lakh then import duty of 60% is imposed on such vehicles. All these provisions will contribute to Model 3 to be priced much higher than its fueled competitors. Hence, proving it to be not a wise idea to launch it in the Indian market.
Further, the company needs to analyse the demand for the Tesla vehicles and to collect funds that will help it set-up a plant in the country. Traditionally, this is done by selling cars which are succeeded by the decision of factory set-up. It’s interesting to notice that the business tycoon gave a special mention to the recent reductions in taxes that give the company much hope regarding its future ventures in India.