Tesla Inc. is willing to put up to 2 billion USD into the construction of a new car factory complex in India, but only as long as the local authorities agree to cut the EV import rates for the brand, The Economic Times reports.
The negotiations are already ongoing, and the Indian authorities have brought their own demands to the table that the U.S. electric carmaker may or may not agree with. For one, the government is currently running safeguard tariffs for all imported vehicles, reaching 100% of the car cost for cars priced above U.S. $40,000. Even importing a sub-$40,000 car into India necessitates paying 70% of its price in the form of taxes.
Tesla is currently asking for an exception. The company wants the tax to be as low as 15% for the first two years of operation in India. Should the authorities agree and let Tesla import 12,000 EVs into the country with this lowered tax in place, the American company would invest $500,000 into the development of the country’s economy. If the same agreement is reached for 30,000 EVs, the investment amount will be quadruple of that.
At this point, Tesla says it primarily intends to build and sell its Model 3 and Model Y in India, with more options coming later.