US electric carmaker Tesla is willing to invest up to $2 billion to establish a local manufacturing, provided that the government grants a concessional charge of 15 per cent on imported automobiles. The American automobile major will do this for the first two years of its operations in India, according to a report by Economic Times.
Sources with knowledge of the situation claim that Tesla, which is owned by billionaire Elon Musk has presented the union government with a comprehensive plan that ties the amount of investment to the quantity of vehicles it is able to import duty-free.
If the government extends a concessional tariff for 12,000 automobiles, the corporation is willing to invest up to $500 million, if the reduced tax is granted for 30,000 vehicles, this can be increased to $2 billion.
In addition, the government wishes to lower the quantity of vehicles that can be imported under a concessional tariff in comparison to the quantity that Tesla has suggested.
It's assessing whether or not to limit concessional tariffs to 10 per cent of the total estimated number of electric vehicles (EVs) sold in India during the current fiscal year (i.e., 10,000 units), with the option to raise them by 20 per cent for the next year.
It was earlier reported that whatever incentives India grants to support local manufacturing of electric vehicles (EV) will be equal for both domestic and foreign investors.
Sales of EVs were estimated to be about 50,000 in FY23 and to reach 100,000 in FY24.
Tesla has pledged to localize up to 20 per cent of the value of cars built in India within two years, and up to 40 per cent within four.
India has implemented a 100 percent import tax on cars that have a value of more than $40,000 including cost, insurance, and freight. Additionally, vehicles that are priced lower than this threshold will face a 70 percent import duty.