First Apple and now Tesla. China may face its second consecutive blow. These two American companies had a lot of influence in China. Both the pace of China’s economy and employment depended on these companies. Due to China’s relations with America and then China’s Covid policy, Apple first parted ways and came towards India. Now India is preparing to pull Tesla from the jaws of China. Government departments are busy in giving all the necessary approvals by January 2024.
ET quoted experts as saying that the PMO held a meeting with top officials on Monday to take stock of the next phase of EV manufacturing in the country, including Tesla’s investment proposal. According to experts, the agenda of this meeting was focused on policy matters, but it was said that Tesla’s proposed investment in the country should be approved expeditiously by January 2024.
PM Modi visited America in June. During this time, Tesla CEO Elon Musk and PM Modi also met. Since then, the Commerce and Industry, Heavy Industry and Electronics and IT ministries are in discussion with the electric car maker. This deal till January is also important because US President Joe Biden will be present as the chief guest on the occasion of Republic Day.
instructions to resolve differences
Senior Tesla officials have discussed the government’s plan to set up a car and battery manufacturing facility in India. Besides, the EV maker has also asked to bring its supply check ecosystem in India. According to the information, ministries and government departments have been asked to resolve any differences with Tesla. Tesla had earlier demanded a 40 percent import duty on fully assembled electric cars. Whereas the current rate is 60 percent on vehicles costing less than $40,000 and 100 percent on vehicles costing more than $40,000.
India’s customs system does not differentiate between electric cars and cars running on hydrocarbons and levies higher charges to promote local manufacturing. The company wants its cars to be considered EVs and not luxury cars. High charging has been a sticking point between Tesla and the Indian government. Tesla wants to sell some cars in the country first before setting up a manufacturing unit.
There may be changes in EV policy
To bring Tesla to India and accept its point, the government can also change its EV policy. For this, a new category can also be announced in this policy. However, officials say that bringing this new category does not mean that it is being done only for Tesla. If any EV maker in the world wants to set up manufacturing in India, it will get the benefit of this facility.
Shock to Tesla in China
On the other hand, Tesla sales are continuously decreasing in China. Even after cutting prices several times, there has been no benefit. Even China’s BYD has benefited a lot. In the past quarters, BYD’s sales in China and globally have been higher than Tesla’s. This is the reason why Tesla wants to make India its next market. Besides, it also wants to tap the Asia and South Asian market by setting up a manufacturing unit. On the other hand, if Tesla exits China, it may also face a big blow.