October 16, 2021

Ukraine Breaking News

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Gather Here to Cut Costs: Tesla Minister – ET Auto

NEW DELHI: Tesla’s plan to import cars into India under service concessions has met with a stumbling block. The heavy industries ministry, which defines the country’s auto industry policy, told the US electric car giant that the government is not in favor of a tariff cut based solely on “intent to invest.” The government has suggested that the Elon The entity founded by Musk should start its business in India starting with local assembly operations, and then expand it to full-fledged production. “Offering duty concessions when someone considers the investment after two to three years will be a reversal of a policy we have followed for several years and will be unfair to existing players,” a government source told TOI. adding that lower rates cannot be offered to just one company.

The government fears that an industry-wide cut in customs duties will result in the importation of electric vehicles instead of companies, such as Ola, setting up manufacturing facilities.

Tesla executives have been told they should consider importing semi-knocked down kits (SKDs) into the country and assembling them locally to attract lower tariffs, instead of importing fully built units. Tesla told the government that it is already purchasing components from India for its global supply chain and proposes to increase it. Musk recently proposed reducing tariffs in India as the company prepares to start sales. “Hopefully there will be at least a temporary tariff relief for electric vehicles. It would be greatly appreciated, “he said in a Twitter conversation. India maintains tariffs above 100% on imported vehicles as part of a strategy to encourage companies to produce domestically, a strategy that has seen several automakers open a store in the country. He wants to adopt a similar strategy for electric vehicles, with some officials arguing that the government’s stance against offering Apple-like concessions a few years ago led the iPhone maker to persuade its suppliers to set up plants. of production in the country.

Several agencies such as NITI Aayog, the Ministry of Transport and the Department for the Promotion of Industry and Internal Trade are advocating a tariff cut. But in the absence of support from the heavy industries ministry, the move is unlikely to go through.

Tesla plans to invest 5 billion euros in its battery cell factory in Gruenheide, near Berlin, to complete its nearly finished electric car factory in the same location, according to estimates by the German economy ministry.

Shailesh Chandra, president of Tata Motors’ passenger vehicle business unit, said incentivising localization remains the key to fostering greater adoption of the electrical system and making it accessible, and therefore efforts should be made to make products and components in India against the subsidized imports.

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