Tesla ‘Not Interested’ in Manufacturing in India: Heavy Industries Minister
New Delhi: Tesla is not interested in manufacturing in India, said Union heavy industries minister H.D. Kumaraswamy while announcing the guidelines to a scheme incentivising companies looking to import electric vehicles (EVs) into India to manufacture domestically – a move initially seen as a win for the Elon Musk-run firm.
Notified in March last year, the scheme will lower to 15% import duties on four-wheeler EVs costing at least $35,000 for firms that invest Rs 4,150 crore (a little less than $500 million) in India and set up a plant to make electric cars in the country.
Kumaraswamy, who announced the guidelines for this scheme on Monday (June 2), said that Mercedes-Benz, Volkswagen, Skoda, Hyundai and Kia had shown interest in participating.
Asked about firms like Tesla and Vietnam's VinFast, which primarily produce EVs and whom the scheme is also aimed at, Kumaraswamy said Tesla is “not interested in manufacturing in India”.
“Tesla, we are not actually expecting [interest] from them. They have only [shown interest] to start two showrooms,” he also said.
The firm as of February this year had selected a site in Delhi and Mumbai each for showrooms to sell imported EVs from, Reuters had reported.
When the scheme was notified it was seen as a victory for Tesla, which had lobbied for concessions along these lines. Musk was scheduled to visit India in April last year, meet Prime Minister Narendra Modi and, per Reuters, announce an investment of $3 billion in a car plant.
However, he deferred his visit citing “very heavy Tesla obligations”. Later that month, he made a surprise trip to China, where he made progress in having his company's advanced self-driving technology accepted in that country.
Musk has been an opponent of India's high tariffs on auto imports. The import-incentive scheme proposes to lower them to 15% from their current value of between 70% and 100%.
According to the scheme's guidelines, approved firms – which can import up to 8,000 electric cars a year for five years – must make their Rs 4,150 crore investment and set up a functional car plant within three years of being greenlit under the scheme.
They must also fulfil a domestic value addition of 25% within the first three years and 50% by five years.
The window for applications will be open for four months or more, the heavy industries ministry said. News agencies report that applications could open this month itself.
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