Elon Musk says import duty playing spoil sport in launching Tesla in India

When will Tesla’s electric vehicles (EVs) come to India? That’s a question that Elon Musk has been asked time and again.

In March this year, Musk was asked the same question by Twitter user Shubham Rathi, to whom he replied saying : “Would love to be there this year. If not, definitely next! [heart> India.” However, in his latest response to the same question, Musk shows some scepticism for the company’s launch in the country.

Once again, the high import duty in the country seems to be keeping the company from entering the Indian market. He is afraid that the up to 100 percent duty on Tesla cars will make them “unaffordable” in India.

I’m told import duties are extremely high (up to 100%), even for electric cars. This would make our cars unaffordable.

— Elon Musk (@elonmusk) August 1, 2019

He further says that in other countries, Tesla is able to pay in parts for the local factories by selling their cars there ahead of time. This also helps them get a sense of demand for their cars in the country. However, in India, the current import rules prevent that.

But here’s a little light at the end of the tunnel. Musk believes that the recent changes in sales taxes in India may be helpful in the future.

For other countries, we pay in part for the local factory by selling cars there ahead of time. Also, gives a sense of demand. Current rules in India prevent that, but recent changes in sales tax give hope for future changes.

— Elon Musk (@elonmusk) August 1, 2019

Tesla has been trying to enter the Indian market since 2016 but has been unsuccessful due to lack of infrastructure, policies and the market for electric vehicles. Back then, Musk had announced that it plans to bring the affordable Model 3 to India and also the “India-wide Supercharger network”, which can juice up the depleted batteries in 75 minutes.

In 2017, Musk revealed a big bump in the plan.

Maybe I'm misinformed, but I was told that 30% of parts must be locally sourced and the supply doesn't yet exist in India to support that.

— Elon Musk (@elonmusk) May 22, 2017

Something similar happened last year in 2018 as well. Tesla fans in India were shown another ray of hope, which died pretty quickly as well. Musk once again showed interest in the Indian market and said that some “challenging government regulations” were keeping the company from entering the market. However, he said that Tesla CFO Deepak Ahuja is from India, and Tesla will be here as soon as Ahuja believes they should.

Would love to be in India. Some challenging government regulations, unfortunately. Deepak Ahuja, our CFO, is from India. Tesla will be there as soon as he believes we should.

— Elon Musk (@elonmusk) May 30, 2018

However, days later, the company announced that Ahuja would be resigning from his role.

As for the Indian government, which has plans to allow only electric cars in the country by 2030 , is also promoting assembling of electric vehicles in India. Recently, the customs duty on EV components and parts was reduced to 5 percent. A pre-assembled EV will attract 15 percent taxation whereas the ones assembled in India will attract 10 percent taxation.

At the same time, the Central Board of Indirect Taxes (CBIT) has withdrawn exemption of customs duty for EV batteries, to boost their production in India, which might help the Indian EV ecosystem and the Make in India initiative in the long run.