Incentives To Local And Foreign EV Firms To Remain Similar: Report

Govt officials have clarified that tax breaks will not be company specific after Commerce Minister Piyush Goyal's visit to a Tesla factory stoked fears of the Govt's special treatment of the Elon Musk-led firm
An electric vehicle (EV) on charge
An electric vehicle (EV) on chargeGetty Images

In the midst of worries expressed by Indian automakers over potential import duty discounts to American automaker Tesla, government officials declared that whatever incentives India grants to support local manufacturing of electric vehicles will be equal for both domestic and foreign investors.

Tesla has requested temporary tariff concessions in order to establish a manufacturing facility in India. However, New Delhi is opposed to any exemptions that would be company specific, senior government officials with knowledge of the matter told ET.

"The government's approach is for the industry as a whole and not for any specific company because we have very strong domestic companies in this sector," said an official who spoke with ET.

The government is currently developing a policy to encourage domestic production of electric vehicles at a time when Vietnamese competitor VinFast and US electric vehicle manufacturer Tesla are solidifying their plans to enter the Indian market.

Although the industry hasn't officially objected to the government yet, a number of automakers are worried that lowering import duties will give Tesla, which hasn't made any significant investments in this country, an unfair edge.

In addition to domestic auto giants like Tata Motors and Mahindra & Mahindra, which currently manufacture EVs in the country, other businesses like Maruti Suzuki and Hyundai-Kia have made large investments to establish plants for assembling batteries and battery packs, and they plan to introduce over a dozen electric vehicles into the market by 2030.

Hyundai has declared plans to invest Rs 20,000 crore in Tamil Nadu, while Suzuki Motor Corp, the parent company of Maruti, has pledged to invest Rs 7,300 crore in the establishment of a battery plant in Gujarat.

India's Minister for Commerce & Industry, Piyush Goyal, visited a Tesla factory in Fremont, California, on 14 November. The visit led to speculations that the government may be considering lowering taxes for Tesla in an attempt to lure it to build its cars here.

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