Elon Musk News: America’s electric vehicle maker Tesla founder and CEO Elon Musk has said that he is facing a lot of challenges at the government level to sell Tesla cars in India.
How did the story begin?
Tesla, the world’s most valuable auto company, has been trying to launch its cars in India for a long time. A user on Twitter had asked Elon Musk if there was any update regarding the launch of Tesla in India. The company’s cars are great and they should be in every corner of the world. In response, Musk said, “There are many challenges ahead and we are working closely with the government.”
Demand was made to the government to reduce tax
Tesla had requested the government to cut import duties on electric vehicles, but some domestic auto companies are opposing it. He says that this will affect investment in domestic manufacturing. Tesla plans to sell imported electric cars in India this year, but says tax rates in India are among the highest in the world.
government’s argument
Sources in the government had said that they are not giving such import tax exemption to any automaker and giving tax benefits to Tesla will not send a good message to other companies investing billions of dollars in India.
Elon Musk’s demand for Tesla
Tesla wants the government to reduce import duty in India. Musk says Tesla may open a factory in India but it will depend on the success of its imported cars in the country. Currently, imported cars in India attract a tax of 60-100 per cent. It is 100 percent on cars priced over $40,000 and 60 percent on cars cheaper than that.
What are the options for Tesla?
Tesla has a clear message from the government to start a local manufacturing unit and take advantage of the tax exemption. Tesla is taking time in this because Tesla cars will be expensive if imported and sold. Tesla must begin local assembly of its Model 3 as directed by the government, which will mean better volumes but also require more investment to get started.
Elon Musk’s tweet will not solve the problem
A government source said, “Tesla company is trying to pressure the Indian government with such tweets and using social media and this is not happening for the first time.” Government of India has made it clear that Tesla cannot demand a duty cut without committing to production in India. Government sources said that Tesla should first start manufacturing its electric vehicles in India, only after that any tax exemption. can be considered about.
PLI Scheme for Auto Sector
In September 2021, the Modi cabinet announced the implementation of the PLI scheme for the auto sector. 26,058 crore has been announced under the Auto PLI Scheme. This scheme is for auto, auto component manufacturer and drone industries. The objective of this scheme is to make India a manufacturing hub for the auto sector. An incentive of Rs 26,058 crore will be given over the next five years. In the Budget 2021-22, Finance Minister Nirmala Sitharaman had announced the PLI scheme for 13 different sectors. An outlay of Rs 1.97 lakh crore was kept for this scheme.
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