Elon Musk, the billionaire entrepreneur, said on Thursday that Tesla is “working through” a number of issues with the Indian government ahead of its long-awaited launch in the country.
Attempts to negotiate reduced import duties, which can be as high as 100%, have delayed Tesla’s plans to sell its vehicles in one of the world’s largest marketplaces.
Musk, in response to a tweet inquiring about a possible India launch date, said his California-based company was “still working through a lot of problems with the government,” but did not reveal the challenges.
Last July, Musk tweeted that Tesla wants to enter India, which has a population of 1.3 billion people, but that “import duties are by far the highest in the world by far of any major country.”
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He went on to say that the company was expecting for some temporary tariff relief.
In India, imported electric vehicles costing more than $40,000 are subject to a 100% tax, while those costing less than $40,000 are subject to a 60% tax.
Tesla is concerned that the high tariffs may force them out of the cost-conscious Indian market.
Aside from that, Tesla will face competition from other international manufacturers, such as Mercedes-Benz, which recently announced that a locally assembled EQS—the electric version of its premium S-Class sedan—will be available in India by the fourth quarter.
The Indian government has given incentives for foreign automakers to produce vehicles in the country, but Musk has stated that he wants to assess demand first with imports.
According to data conducted by digital consultant Techarc, electric automobiles accounted for only 1.3 percent of all vehicles sold in the country in 2020-21.
As part of a larger campaign to decarbonize the transportation industry, the government wants 30% of private cars to be electric by 2030.
