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NEW DELHI : Tesla CEO Elon Musk has found a friend in Aaditya Thackeray, the Minister for Tourism and Environment of Maharashtra as the latter has recommended the Union Finance Minister Nirmala Sitharaman to lower the import duty on electric vehicles (EV).
In his letter to the Finance Minister, Thackeray suggested that the concessionary rate could be for a maximum of three years or a defined import limit for any company wishing to import vehicles for retail sale or import international standard components for making EVs in India.
"Pioneering companies like Tesla, Rivian, Audi, BMW among many others must be given a time-bound concessionary customs rate for the import of vehicles for retail sale. This will drive the aspiration value in the market, boost investment in our supply chain and encourage the startup ecosystem to follow te lead of such companies." he said.
He was of the view that the concessionary rate could also be given in return for a fixed investment guarantee in India's auto supply chain or charging infrastructure which could be to the tune of the customs' revenue the government foregoes relative to te current tax regime, which could be assessed annually.
"A mere high import duty only adds to the burden of the customer and does not lay the ground for any industry investment as custom revenues are not directly used for sectoral investments," said the letter dated January 17.
Noting that the pickup in retail lending to support consumers and institutions in financial EVs has been slow, the Maharashtra minister also urged Sitharaman to allow priority sector lending for EVs.
"EVs in the Reserve Bank of India's priority sector lending guidelines can encourage the financial sector to mobilise necessary capital," he said.
The letter comes just days ahead of the Union Budget for FY 2022-23.
Global automakers, including Musk-led EV giant Tesla have time and again raised concerns over high import duty for electric vehicles.
The Centre has so far been in favour of production of EVs by the global majors including Tesla in India, rather than giving a relief on the import duty front.
In a recent tweet, Mush had said: "Still working through a lot of challenges with the government." Following this, three states, Maharashtra, Telangana and Punjab have invited the US-based EV maker to set up manufacturing plants in their respective states, promising support and incentives for the company.
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