Tesla is willing to invest $2 billion in India, but very high tariffs prevent it.
Tesla is willing to invest $2 billion in India, but very high tariffs prevent it.
Tesla want to get their hands on a market like India is well known. Why wouldn’t a brand like Tesla want to capitalize on the world’s third-largest automobile market?
In the same way that we have been talking for a long time about the North American brand’s intentions and the negotiations with the country’s authorities, there is still nothing clear or official. There is talk that Tesla could create a new factory there or a reference point for manufacturing its Powerwall batteries…
The latest information that the Reuters agency has released would have to do with one of the great impediments that Tesla faces with the South Asian giant, which is none other than the enormous tariffs on imports in the country.
100% tariffs on electric cars from other countries
India is a strongly protectionist country in the automotive sector, an ideal way to protect its large (and small) manufacturers. These have great power in their current status, especially to prevent foreign cars from reaching the roads of their country.
Tariffs in India are 100% for vehicles over $40,000 in price; For the rest, their tariff is ‘only’ 70%. However, some movements have recently been announced to try to open the Indian market to other manufacturers, such as the British. Let’s not forget that the English Jaguar-Land Rover duo belongs to the Indian group Tata.
Indian politicians’ negotiations with other foreign manufacturers discuss reducing this tariff for a certain number of vehicles and for a certain time. Tesla’s intentions would go that way.
The North American brand would be willing to invest $2 billion in India if these commercial obstacles can be overcome. The negotiations would be directed towards a 15% import tax for electric cars: if this tariff is agreed upon for at least 12,000 vehicles annually, Tesla would only invest 500 million dollars. If the volume reaches 30,000 vehicles, it will reach those 2 billion.
The ‘motion’ would be under study. Let us remember, however, that the Indian prime minister, Narendra Modi, has been present in past meetings and negotiations with Tesla, urging Elon Musk to invest in his own country.
It is not yet clear what the investment would involve since, for that amount, it seems difficult to think of a Gigafactory, especially when the brand would be willing to manufacture some 500,000 electric cars per year there in India and serve as a bridge for other countries in the region. Indo-Pacific. The other options proposed are an assembly plant, component production plant, or the Powerwall above proposed options.
The positions seem to be getting closer, and Indian manufacturers are beginning to open their hands to the arrival of other foreign brands in their territory. They will not, however, reach the prices offered by manufacturers such as Tata or Mahindra. They would allow Tesla (and others) to cover a premium market latent in the country.
Source- Reuters
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