Tesla’s potential venture into the Indian market with its vehicles would “likely” have to involve the import of vehicles that would come from the company’s Germany production plant known as Giga Berlin, according to a new report.
Tesla has been trying to get its cars into India to test demand for several years. To gauge accurately the demand for its vehicles, Tesla has attempted to woo the Indian government to roll back import duties, but officials have been uneasy about the idea.
Instead, India has suggested that a firm commitment from Tesla regarding the construction of a new Gigafactory in its country would be enough for the government to consider a rollback. Of course, Tesla will not commit to this because if demand is low after the commitment to build a factory, then it is caught in a difficult financial pickle.
India has also been extremely against the idea of testing demand through imports that would come from Tesla’s Giga Shanghai plant in China. India has always prioritized domestic manufacturing, but due to a tense relationship between it and China, importing Shanghai-built cars would be something that is considered a non-negotiable.
Yesterday, we reported that CEO Elon Musk would meet with Indian Commerce Minister Piyush Goyal next week to iron out the final details between Tesla and India, hoping to soon come to terms that would see a Gigafactory come to the region.
Tesla CEO Elon Musk to iron out India entry in meeting with commerce minister
A potential clause would see India roll back import taxes to 15 percent. Depending on price, they can be as high as 100 percent on some vehicles. If it costs more than $40,000, there is a 100 percent customs tax. Anything under that is subject to 60 percent.
However, it seems if the 15 percent rollback does happen, India will have its say on where the vehicles will come from.
A new report from MoneyControl claims that India will have Tesla import vehicles from Giga Berlin in Germany. A source told the publication:
“Due to geopolitical tensions between India and China, the top management at Tesla has been categorically told by the ministries not to import any car from the world’s largest EV market. Moreover, Indo-German ties on multiple disciplines have been inked earlier, and the US EV maker is encouraged to leverage the same.”
Tesla may need to oblige in order to get an accurate assessment of whether it would be worth building a factory in India.
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