PM Narendra Modi Shouldn’t Chase Elon Musk-led Tesla to Make in India
Elon Musk may be close to winning a long-running battle of wills with the Indian government led by PM Narendra Modi. Policy makers in New Delhi have been hoping to entice Tesla Inc. to produce electric vehicles in India. Musk, meanwhile, wants to sell his cars here without paying the exorbitant import tariffs that India charges.
According to Bloomberg News, the two sides may now be close to an agreement that would slash tariffs on Tesla imports from 2024, as long as the company sets up a factory in India within the next two years. Tesla may invest $2 billion in the plant and commit to buying as much as $15 billion worth of inputs from domestic automotive component producers.
Elon Musk could certainly count such a deal as a win. Indian consumers, too, might not complain if they can buy top-of-the-line electric vehicles at tariff rates of only 15%, compared to the 100% they currently pay on imported autos.
If the Indian government believes this is how to build an EV-manufacturing ecosystem, however, it ought to think again.
No good is likely to come of concessions tailored for a single company, no matter how successful or high-profile. True, when this policy is eventually written, it will likely apply universally. Every EV maker willing to meet the requirements should be able to take advantage — excluding, probably, the Chinese companies that now account for over half of global EV sales.
At the same time, if the policy is designed specifically to suit Tesla's needs — say, by agreeing to the company's preferred timeline and tariff structure, or subsidizing “superchargers” rather than battery swapping — it may not help competitors much.
New Delhi might point out that other policies designed with particular companies in mind have
Read more on tech.hindustantimes.com
