Tesla talks with govt for India drive
Elon Musk-founded Tesla, which makes electric cars, has initiated talks with the government to enter India through the single-brand retail route, which comes with several riders including mandatory sourcing of up to 30% of the value of goods sold in the country.
The company has written to the government evincing interest in entering the market through the single-brand retail window, sources told TOI. The development comes months after Musk had tweeted about the high import duty and sourcing requirements.
“In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built,” he had tweeted on June 15.
Sources said granting an exemption may not be easy and in any case with duty in excess of 100% the import route did not make sense.
The government is expected to formally reply to Tesla over the next few weeks, considering there is interest not just from buyers but even at the level of Prime Minister Narendra Modi, who had visited the company’s headquarters in 2015 in what was seen as an attempt to get the company to India.
There is no clarity on how Tesla planned to provide after-sales service in India and develop infrastructure to charge the vehicles. A questionnaire e-mailed to Tesla on Tuesday evening remained unanswered.
The proposal comes amid a push from the government to move to electric vehicles with transport minister Nitin Gadkari recently reading the riot act at a recent conference of the Siam, the auto industry lobby group, where he talked about having only electric cars on Indian roads by 2030.
Already, several companies such as Maruti and Ford are planning forays into the segment.
While the plan was to hit the Indian market this summer, Musk had pointed to difficulties in complying with the local sourcing requirement, which can be waived for “high-technology goods”, due to the absence of a vendor base.
The government had responded by suggesting that the local sourcing requirement did not exist for locally manufactured goods.
Although the provision to grant an exemption to “high-technology) goods has existed for nearly two years, none of the applicants, including Apple, have managed to get a waiver so far. In fact, in case of a British company, the government took the view that only 10-15% of the products sold by it fell into that category.
In case of Apple, the government has questioned if some of the products touted as “hightechnology” actually fell into that category. In case of several components, Apple has told the government that they are under development, sources said.