On the evening of May 13, Beijing time, it was reported that three people familiar with the matter said today that Tesla had shelved its plan to sell electric vehicles in India, gave up looking for exhibition halls locally and reassigned team members because it failed to obtain lower import tax concessions.
This decision put an end to the deadlock negotiations between Tesla and representatives of the Indian government for more than a year. The reason is that Tesla hopes to test the demand of the Indian market by selling electric vehicles imported from the United States and China at lower tariffs. The Indian government wants Tesla to promise to make cars locally first, and then reduce tariffs.
In order to sell imported cars, Tesla has been calling on the Indian government to reduce import tariffs. At present, the import tax of electric vehicles in India is: for vehicles with a price lower than 40000 US dollars, the tax rate is 60%; For cars with a price higher than $40000, the tax rate is 100%. According to Tesla's US website, only one model of the company sells for less than $40000. This will make India the most expensive market for Tesla cars in the world, which most Indian consumers can't afford.
People familiar with the matter said Tesla set itself a deadline of February 1, the day when India announced its budget and tax reform, to see whether its lobbying had produced results. But in the end, when the Indian government did not give in, Tesla shelved its plan to import cars from India.
People familiar with the matter also said that in recent months, Tesla has been looking for car showrooms in major cities in India, including New Delhi, Mumbai and Bangalore. But now the plan has been shelved.
Tesla and the Indian government have not commented on this.
Last February, Tesla registered a company in India, taking a step towards entering the Indian market. At that time, Tesla was expected to enter the Indian market as soon as mid-2021.
In February this year, it was reported that in order to reduce the import tax on electric vehicles, Tesla must promise the Indian government to purchase at least $500 million in auto parts from India.