Tesla’s entry has major Indian EV players worried, Mahindra, Tata lobbying for ‘level playing field’

Indian automaker Mahindra & Mahindra has called for a level playing field between domestic and foreign players in the electric vehicle (EV) market, emphasizing the promotion of local manufacturing. As the Indian government reviews Tesla’s plans to enter the market, Mahindra Managing Director Anish Shah stated that it is crucial for global EV manufacturers to be encouraged to invest in India, as per a report by Reuters. While not directly mentioning Tesla, Shah highlighted the importance of creating a stronger industry within India and avoiding a scenario where manufacturing is primarily conducted outside the country. Mahindra and Tata Motors have reportedly urged Indian officials to maintain the current 100 per cent import taxes on electric vehicles to protect domestic firms and their foreign investors. The government is considering a policy to reduce import taxes, a move that has raised concerns among local automakers. Last year, India sold four million cars, with only 82,000 being electric vehicles. Despite the nascent stage of the EV segment, it experienced significant growth, recording a 115 per cent increase compared to the previous year. Mahindra has secured approximately $400 million from Singapore’s Temasek and British International Investment, while Tata Motors attracted investments totalling $1 billion in 2021 from private equity firm TPG and Abu Dhabi state holding company ADQ. Anish Shah revealed that Mahindra plans to list its EV unit, but not before 2029, emphasizing the need to demonstrate significant success in the business before going public. He affirmed that electric vehicles represent the future for Mahindra. Tesla has proposed establishing a factory in India and has called for reduced import taxes on electric cars. The Indian government is working on a new policy that could cut import taxes on EVs to as low as 15 per cent for companies committing to local manufacturing. However, concerns have been raised within the Indian industry about potential risks to future fundraising for local EV companies if Tesla’s entry leads to an unstable or unfavourable import tax regime. (With inputs from agencies)