M&M Advocates Level Playing Field for EV Manufacturers in India Amidst Tesla's Entry Plans

17 Jan 2024 , 08:43 AM

As New Delhi tries to entice automakers like Tesla, Indian automaker Mahindra & Mahindra has informed the government that there must be fair playing fields between domestic and foreign businesses and that local production must be fostered, according to news reports.

According to a Reuters story from last month, Mahindra and Tata Motors have quietly pressured Indian officials to keep import levies on electric vehicles from being lowered to 100% and to safeguard domestic companies and their foreign investors while the government evaluates Tesla’s plans to enter the market.

Mahindra Managing Director Anish Shah told Reuters that his company has made suggestions to Indian officials suggesting that international EV companies must be prodded to invest in India when questioned about Tesla’s entrance and New Delhi’s proposed policy to decrease import duties.

In an interview with Reuters at the World Economic Forum annual meeting, Shah stated, ‘It should be a level playing field and investing in India is important,’ without specifically mentioning Tesla.

‘Our approach is essentially to create a stronger industry in India, and not to be in a situation where manufacturing is done outside India, and India just becomes an importer of products,’ he stated.

Just 82,000 of the 4 million cars sold in India last year were electric vehicles (EVs), but sales in this relatively new market increased by 115% over the previous year.

Mahindra has secured approximately $400 million in funding from Temasek and British International Investment, while Tata received a $1 billion investment in 2021 from private equity firm TPG and Abu Dhabi state holding company ADQ.

Though not before 2029, Shah stated Mahindra intends to float its electric vehicle division ‘because we need to be able to show significant success in that business.’

He declared, ‘For us, electric is the future.’

Tesla has asked for lower import duties on electric vehicles in addition to proposing to build a manufacturing in India. According to Reuters, India is developing a new policy that will reduce import duties on electric vehicles to as little as 15% for businesses who commit to some local manufacture.

However, this has alarmed the Indian market, as insiders claim that Tesla’s debut may jeopardise the future funding of EV firms in India, which depend on a stable and advantageous import tax system.

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