Synopsis: Tata Motors, India’s largest electric vehicle manufacturer, has spoken out against any reduction in import duties on electric vehicles, as proposed by Tesla CEO Elon Musk.
Tata opposes tax break for Tesla and believes that lowering import duties is incompatible with the Indian government’s FAME (Faster Adoption and Manufacturing of Hybrid and Electric Car) programme, which encourages green vehicle indigenization and localization.
Currently imported electric vehicles are charged an import duty of 100% if the value is over $40,000 ( inc. insurance and freight). Electric vehicles below $40,000 are charged an import duty of $40,000.
The cost of electric vehicle variants sold by Tesla currently ranges from $39,900-$250,000 in the US.
Tata opposes tax break as they feel domestic EV’s are critical for Indians to shift to the electric variant.
Shailesh Chandra, President president of Tata Motors passenger vehicles business unit, said that efforts should be made to combat subsidised imports because localisation is critical to increasing EV adoption while keeping them affordable.
“FAME has really focused on two aspects. The first aspect is bringing affordable EVs… which are less than Rs 15 lakh. The second very clear articulation is localisation.
Because if you have to really drive electrification on a sustainable basis, till you don’t ensure a road map for local value addition, this will not be sustainable.
It’s worth noting that the Mumbai-based cars-to-coffee giant is optimistic about the EV market. The electric version of the Nexon small SUV was well welcomed, and the company is considering further models.
According to Chandra, Tesla’s and other manufacturers’ proposals for lower import tariffs on electric vehicles “runs slightly against that direction of the FAME initiative,” as well as its articulation and direction.
Chandra went on to say that Tata Motors, which sells over 90% of the EVs in India’s passenger car market through Nexon, has used FAME as a “single point of reference” in its expansion plans. This will not be viable as a road plan for local value addition.”
