Tesla proposes to build a factory in India due to import tax on electric vehicles

According to news on May 18, Tesla plans to build a new electric vehicle production plant in India to meet the needs of the Indian market and expand international markets.

Tesla has proposed to the Indian government to build a factory that will produce electric vehicles and sell them domestically in India while exporting to other international markets. The proposal comes after Tesla's request last year to reduce taxes on imported electric vehicles in India was rejected by the Indian government. Tesla faces certain difficulties selling products in India because India's import taxes on electric vehicles are as high as 60% to 100%.

In July 2021, Tesla sent a letter to the Indian transportation and industry departments, calling for the import tariff on electric vehicles to be reduced to 40%. Although Tesla has been urging the Indian government to cut import duties for several weeks, the Indian government has not announced any plans to reduce import duties on electric vehicles.

According to ITBEAR Technology Information, despite this, the Indian government still regards the development of electric vehicles as a priority and has promised to provide billions of dollars in incentives to companies to encourage them to produce electric vehicles in India. Tesla hopes to test the market through imported sales, while India wants it to build a local factory to produce electric vehicles. Tesla planned to sell electric cars in India, but the plan was later suspended after import taxes could not be reduced.

According to people familiar with the matter, Tesla is proposing to build a new factory this time and is negotiating with Indian government officials on relevant details. Tesla is not only considering building a factory in India, but also plans to purchase parts locally to diversify its supply chain and reduce its dependence on the Chinese market.

Tesla’s proposal to build a factory in India shows its importance to the Indian market and also injects new vitality into the development of the Indian electric vehicle industry. This move is expected to promote the development of India's electric vehicle industry, drive the growth of related industrial chains, and promote India's transformation towards clean energy and sustainable transportation.

It is worth noting that the negotiations between Tesla and the Indian government have not yet included the issue of reducing import taxes on electric vehicles, which may become an important issue for future cooperation between the two parties. Cooperation and communication between the government and enterprises will be a key factor in promoting the continued development of the Indian electric vehicle market. We will continue to pay attention to Tesla's developments in India and continue to report on relevant developments.

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