American electric vehicle maker Tesla will not be receiving any special relief in the form of reduced import duties in India. The Centre on Monday said there was no plan to remove or reduce the import duties for electric vehicles of any kind.
The clarification came after Tesla CEO Elon Musk said his company’s operations in the country hinged on the performance of its imported models. However, imported Tesla models would attract heavy import duties – as high as 100 percent -- due to the high value of the cars, making them unaffordable for many.
"No such proposal is under consideration in (sic) Ministry of Heavy Industries," Krishan Pal Gurjar, minister of state for power and heavy industries, said in the Parliament on August 2.
Gurjar added that the government was encouraging the adoption of electric vehicles in India through improving the charging infrastructure in the country along with lowering taxes on such vehicles.
With Gurjar's reply, Musk's hopes of lowered import duties for his vehicle seem completely dashed for the moment.
"We want to do so, but import duties are the highest in the world by far of any large country! Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India," Musk had tweeted before.
The comments by Musk had sent the auto industry in a tizzy, with many CEOs of foreign carmakers supporting Musk's calls for lowered import on electric vehicles. Domestic automobile manufacturers like Tata Motors expressed that the playing field should remain level for all entities.
However, Ola Electric CEO Bhavish Agarwal "strongly disagreed” with Musk's statements.
The adoption of EVs will be a major step in reducing carbon emissions for India, but with most fully electric cars running much more expensive than the cost of the median car in the country, the market penetration has been extremely weak. Poor charging infrastructure has also contributed to the lack of popularity of EVs in India.