Tesla Inc. is one step closer to making its official debut in India, having received permission to manufacture or import four models in the South Asian country.
Tesla’s vehicles have been certified as roadworthy in India, according to a posting on the website of the country’s ministry of road transport and Highway.
According to the site, “the tests ensure that the vehicle meets the requirements of the Indian market in terms of emission, safety, and roadworthiness.” A Tesla fan club had earlier tweeted about the development, speculating that the vehicles were most likely Model 3 and Model Y variants.
Gaining a toehold in the Indian car market will be difficult given that EVs account for only 1% of the country’s annual car sales and Tesla’s vehicles are very highly-priced. Another reason India is falling behind in the electric transition is a lack of charging infrastructure and financing for companies interested in developing electric vehicles.
Another impediment is the country’s high tax structure. Elon Musk, CEO of Tesla, tweeted last month that import duties in India are among the highest in the world and that the country continues to treat clean energy vehicles the same as gasoline, which is inconsistent with the country’s climate goals. A factory in India is “quite likely,” according to the billionaire if the California-based automaker can first test the waters by importing vehicles.
Tesla’s call for a tax break on imported EVs has been met with mixed reactions. Volkswagen AG’s India unit and Hyundai Motor India Ltd. have supported the move, while Mahindra & Mahindra Ltd. has called for an examination of import tariffs as well as lower domestic levies.
During an earnings call last month, Tata Motors Ltd. Chief Financial Officer P.B. Balaji stated that the government should maintain the current EV subsidy plan, which emphasizes localization and affordability of electric vehicles. The Indian government has stated that there are no plans to reduce import duties on electric vehicles.