Tata Group opposes import duty cut for Tesla

The leader of the electric car market in India – Tata Group has opposed the government’s plans to cut import duty for Tesla. The automaker highlighted that the move goes contrary to the Faster Adoption and Manufacturing of Hybrid and Electric (FAME) vehicle policy, which seeks localization and indigenization of green vehicles.

Shailesh Chandra, president, Tata Motors passenger vehicles business unit, told ToI that incentivizing of localization remains the key to drive higher adoption of electrics and making them affordable. He believes efforts should be made to make the products and components in India against subsidized imports. “It goes slightly contrary to that direction of the FAME programme, how it has been articulated and the direction it has set.”

Like other carmakers in India, Chandra said Tata Motors, which currently accounts for over 90% of EVs sold in the passenger car segment through Nexon, has taken the FAME policy as one single reference as they work on their product expansion plans. “FAME has really focused on two aspects. The first aspect is bringing affordable EVs which are less than Rs 15 lakh. The second very clear articulation is localization. Because if you have to really drive electrification on a sustainable basis, till you don’t ensure a road map for local value addition, this will not be sustainable.”

India is the world’s fifth largest car market with annual sales of about three million vehicles, but the majority of cars sold are priced below $20,000. EVs make up a fraction of the total and luxury EV sales are negligible. Tesla had urged the Indian government to lower import duties on EVs to 40%, as it would make them affordable and boost sales. However, this is contradictory to the government’s push for domestic manufacturing.

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An official had told Reuters that reducing import duties is not a problem as not many EVs are imported in the country. “But we need some economic gain out of that. We also have to balance the concerns of the domestic players.”