The Union Minister revealed at an event that Tesla’s starting price will be way less than what we expected
- Tesla has been lobbying the Indian government for a reduction in import tax.
- Government has asked Tesla to manufacture cars in India.
- It doesn’t want cars made in China to be sold in India.
- Tesla is yet to make any formal announcement about its India plans.
Speaking at the India Today Conclave 2021, Minister of Road Transport and Highways Nitin Gadkari said that the price of Tesla cars will start around Rs 35 lakh in India. The comments came amid a discussion centred around the use of alternate fuels, speed limits on highways, and other issues vis-a-vis the Indian automotive industry.
While this is not a formal announcement in any way, it’s safe to assume that the minister knows more than you and us at this point. Several recent reports have suggested that Tesla is pushing the Indian government to lower import tax on EVs. The government has retaliated by saying Tesla should build its cars in India to avoid the import tax.
If Tesla were to import the Model 3, it would cost anywhere between Rs 50 and Rs 60 lakh. Mr Gadkari has also requested Tesla not to sell made-in-China cars in India, and has asked the American EV maker to set up a plant in the country for domestic production and exports. At the conclave, he further reaffirmed that the government would support Tesla in all ways to set up manufacturing infrastructure in India. Realistically, this is the only way for the Model 3 to be priced around Rs 35 lakh, although Tesla will have to commit substantial funds here to reap any reward.
The only other way such aggressive pricing can be achieved is by a sharp reduction in the import duty, and honestly, we don’t see the government choosing that route. That’s because there would be a few questions raised should the GOI decide to take that path, including how such a move would affect the domestic players.
That said, the minister hasn’t shared any specifics yet on when we could have a formal announcement from both parties. And until that happens, Tesla’s arrival in India continues to remain in a state of flux.