Tesla—the leading name in the electric car market, is in discussion with the Indian government to get an exemption from the import duty and penalty till the local factory is set up in the country.
On Wednesday, Founder and CEO, Tesla—Elon Musk tweeted that, for Tesla to introduce its products at competitive price in India, it will be mandatory to cut the prices down. Another way is to lessen the import duty on cars that is charged up to 100%–120% for fully built units (FBUs). This makes the cars more expensive for sale in India.
India is on its way following its mission to make the transportation system fully electric or hybrid by 2020. It also estimates to take vehicle count of hybrid or electric vehicle to 6–7 Million in the projected span along with the technology indigenization.
The tweet from Musk also implied that the company is in plans to build a local factory in India for car production. It has been also reported that Tesla was in talks with the component manufacturers such as Italy’s Magneti Marelli, and German-based Draxlmaier Group to procure electric parts for its India venture.
Late back in 2016, Nitin Gadkari—Transport Minister of India visited Tesla in California to set up a production factory of electrics in India. Prime Minister Narendra Modi while on his US trip far back in 2015 has also visited Tesla Facility.
In the last month, Musk tweeted that there will be a delay in India launch due to sourcing norms set by the government which includes 30% of required parts should be sourced locally, but on the other hand, the supply doesn’t exist in India to support the production.
Replying to the Musk’s tweet, Indian Government’s handled Make In India, twitted in responded that there is no such regulation on FDI in automobile manufacturing that demands 30% local sourcing of components.
Tesla has initiated booking from Indian customers for its Model 3 sedan. Many of the interested customers from India have pre-ordered Tesla Model for $1000.