Tesla's Chinese vendors may get to Make in India
India could consider allowing Tesla's foreign vendors, notably those based in China, to manufacture critical components in the country but the government is not in favour of any company-specific exemptions, sources aware of the matter said. This assumes significance as some key components of electric vehicles such as battery cells are imported from China. Tesla has expressed interest in bringing its own supply chain ecosystem to India.
«In-principle, if there is any critical parts vendor that needs to be brought, it can be considered. However, no tax incentive can be given to one company,» said a person in the know. India has provided a special dispensation in foreign direct investment clearances to Apple to help shift its Chinese vendors to the country.
Some concessions could be considered for import of Tesla's critical parts, the person said. The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) and production-linked incentive schemes for automobiles and advanced chemistry cell have been put in place to promote EV manufacturing in India. The ministry of commerce and industry and the ministry of electronics and information technology have been discussing the electric carmaker's plans after Tesla chief executive Elon Musk met Prime Minister Narendra Modi in the US during his state visit in June.
Senior Tesla Inc executives have discussed with the government its plans to set up car and battery manufacturing facilities in India. The EV manufacturer is keen to sell its cars in the country but the government has not accepted its demand for lower duties and has instead suggested Tesla manufactures locally. Tesla wanted a 40% import duty on fully assembled electric cars against the current rate of 60%
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