SEATTLE: Tesla Asked To Ramp Up Local Sourcing, Share India Plans: Report

SEATTLE: India has asked Tesla Inc. to
ramp up local procurement and share detailed manufacturing plans before the
carmaker’s demands for lower taxes on electric vehicles are considered, a
person with the knowledge of the matter said.

The ministries
of heavy industries and finance sought the details from Tesla in a meeting
earlier this month even as the government examines billionaire Elon Musk’s
demand for lower taxes on EVs in Asia’s third-largest economy, the person said,
asking not to be identified because the discussions are private.

The
departments have also asked Tesla for its thoughts on importing fully built
cars versus so-called knocked-down units or partially built vehicles, which
attract a lower import levy, the person said.

Tesla
didn’t respond to requests for comment. Representatives from India’s Ministry
of Heavy Industries and the nation’s Ministry of Finance couldn’t immediately
be reached for comment.

California-based
Tesla wrote to Prime Minister Narendra Modi’s government in July asking for the
import duty on electric cars to be reduced to 40% from the current 60% to 100%.
The company also asked for the 10% social welfare surcharge — which is levied
on all imported cars and helps fund health and education programs — to be
scrapped.

At the
meeting, Tesla claimed it has procured components worth $100 million so far
from India and suggested that figure would increase following any tax
concessions, the person said. Tesla also pledged to make significant direct
investments in sales, service, and charging infrastructure and evaluate broader
investments in manufacturing once it enters the world’s second-most populous
nation, the person said.

Musk has
for several years showed his willingness to enter one of the world’s
most-promising automobile markets, but complained that Indian rules prohibit
him from testing the waters first with imports, as high duties make Tesla cars
“unaffordable.”