Elon Musk’s Missed Meeting and Doubled Imports Mark Goyal’s Factory Visit.
Commerce Minister Goyal visits Tesla in the US, highlights doubled component imports, signals growth in India’s EV sector.
Commerce and Industry Minister Piyush Goyal embarked on a significant visit to Tesla’s manufacturing facility in Fremont, California. During this visit, he noted Tesla’s commitment to doubling its auto components imports from India, emphasizing the growing role of Indian suppliers in the Tesla EV supply chain. This development underscores the deepening ties between Tesla and India, following CEO Elon Musk’s meeting with Prime Minister Narendra Modi in June.
Tesla’s Expanding Component Imports:
Minister Goyal expressed pride in the increasing significance of Indian auto component suppliers for Tesla. The company, aiming to source components worth approximately USD 1.9 billion from India in 2023, reflects a substantial increase from the USD 1 billion sourced in 2022. The visit takes on added significance amid speculations about India considering customs duty concessions for Tesla’s potential manufacturing plant in the country.
India’s EV Growth Trajectory:
Anticipating a surge in demand for electric vehicles (EVs), Minister Goyal highlighted the role EVs would play in propelling sectoral growth. The government has outlined production-linked incentive (PLI) schemes for advanced chemistry cell (ACC) battery storage and the broader auto industry, signaling its commitment to fostering a conducive environment for EV manufacturers.
Government’s Incentive Approach:
While addressing Tesla’s potential entry, Minister Goyal clarified that the government is not contemplating a separate policy for incentivizing Tesla. Instead, Tesla can leverage existing schemes like the PLI for auto and advanced chemistry cells. This approach aligns with the government’s commitment to providing equal opportunities and support across the industry without differentiation.
Policy on Duty Concessions:
Responding to queries about potential duty concessions, Minister Goyal affirmed the government’s commitment to equitable policies. He emphasized that any policy formulation would ensure equal opportunities for all stakeholders, reinforcing the government’s unbiased approach to incentivizing and fostering the electric vehicle sector.
Tesla’s Historical Intentions and Import Duties:
Elon Musk’s announcement in August 2021 about Tesla’s potential manufacturing unit in India, contingent on successful imports, adds historical context. Import duties, cited as the highest globally, posed challenges, with India levying 100% import duty on fully imported cars above USD 40,000 and 70% on those below this threshold.
