Elon Musk has once again hinted at a cheap Tesla car for India. Addressing the ongoing G20 summit in Indonesia virtually, the Tesla chief executive officer said he was considering making a cheaper Tesla car for markets like India and Indonesia as a response to a proposal.
“We do think that making a much more affordable vehicle would make a lot of sense and we should do something,” Musk was quoted as saying in a report by The Telegraph.
Musk’s Tesla has been trying to enter India for a long time. The carmaker opened its India subsidiary in Bengaluru to discuss the company’s foray into India with the government. Since India levies a heavy import duty on products as a measure to encourage manufacturers to produce locally, Tesla asked for a tax rebate as it wanted to gauge the market before making an investment toward manufacturing its cars. The Indian government, however, rejected Musk’s request.
According to the report, Vivek Johri, chairman of the Central Board of Indirect Taxes and Customs, said the department looked at “whether the duties need to be rejigged, but some domestic production is happening and some investments have come in with the current tariff structure. So it is clear that is not a hindrance.” He also said that Tesla had not presented a plan to locally manufacture its cars.
While Tesla has been at an impasse with the Indian government, other electric car manufacturers are seeing it as an opportunity to enter the market that is expected to reach $15,398 billion by 2027 in value from $1,435 billion in 2021, representing a CAGR of 47.09 percent, according to reports.
Fisker, one of the companies touted as the rival to Tesla, recently announced its foray into India and is expecting to launch its first electric car in the market in 2023. The same import duty applies to Fisker, but the carmaker said they will comply with the local laws. Fisker said that it is planning to begin local production after some initial years as it wants to grow the brand here. “Ultimately, if you want to have somewhat of a larger volume in India, you almost have to start building a vehicle here or at least do some assembly,” Fisker said.
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