The Indian government is reportedly contemplating a request from Tesla, led by Elon Musk, to reduce tariffs on imported electric vehicles (EVs) as part of efforts to facilitate the establishment of a manufacturing plant in the country.

Tariff Concession Request

Tesla has urged the government to consider reducing tariffs, which currently stand at 70% for cars under $40,000 and 100% for cars exceeding $40,000. The proposed concession is viewed as essential for Tesla’s plans to set up a manufacturing facility in India.

Proposed Tariff Reduction

Officials familiar with the matter revealed that Tesla’s request includes an initial tariff reduction to offset India’s high customs duties. The suggested concession, applicable to all EV manufacturers, could potentially reduce tariffs to 15% across all price segments.

Government’s Perspective

While the government is contemplating the tariff reduction, officials emphasized the importance of formulating a policy that benefits India without exclusively favoring a single company. The proposed tariff adjustments aim to create a conducive environment for EV manufacturing in the country.

Tesla’s Expansion Plans

Earlier reports indicated Tesla’s intentions to establish a battery storage factory in India, with proposals already submitted to the government. Additionally, Tesla aims to contribute to India’s battery storage capabilities through its ‘Powerwall’ technology.

Musk’s Ambitions

Elon Musk is actively pursuing initiatives to expand Tesla’s presence in India beyond manufacturing. Plans include establishing a robust supply chain network to support Tesla’s operations in the country.

As discussions between Tesla and Indian authorities continue, the potential tariff concessions signify the government’s commitment to fostering an environment conducive to the growth of the EV sector and attracting prominent players like Tesla.