[ferrarirules]

Originally Posted by volkman10

Tesla has its way, policy likely to be changed regarding import taxes!

This has been refuted by the finance minister today

Excerpt from the article -

Finance Minister Nirmala Sitharaman on Friday said that there is no proposal before the ministry to lower import duty on electric vehicles. A Reuters report earlier in the day claimed that India is working on a new electric vehicle policy that would slash import taxes for automakers that commit to some local manufacturing

Source - Economic Times - link

[volkman10]

Originally Posted by ferrarirules

This has been refuted by the finance minister today

--

We have to see how it pans out as the statement is vague, but stock market reacts sharply.

Tata Motors slips on reports new EV policy may offer tax cuts; FM says 'nothing before me'

Link

[Turbanator]

After whatever concessions are being discussed, the cheapest Tesla won't be less than 40-50 Lac.

How does it affect TATA/ Mahindra or any other domestic player?

Suppose Tesla and the GOI can arrive at some common relaxations/investments. In that case, it can't get any better for everyone, including Tata and Mahindra, as they can also grow due to overall improvement in the ecosystem. It's premium manufacturers like BMW/ Mercedes who should be worried. Few will buy an iX at 1,2 Cr against a Model Y at 60-70 lac(assuming). This will also force others to set up local production. I don't see harm to existing EV manufacturers in any way.

[kosjam]

If the goal is to protect the nascent EV ecosystem in India, being handheld by Tata/Mahindra/Ola/Ather and the likes, the import duty must not be lowered.

Considering Tesla is no longer a startup company, they should not be given any benefits which they will most likely misuse to dump excess production from China into India.

Had they tried entering when the market did not exist 5-6 years ago, it would have been a different thing, but since Elon is only looking at India as a cash cow, it should be forced to jump through the same hoops that legacy car makers have to jump through.

[NomadSK]

Originally Posted by Turbanator

How does it affect TATA/ Mahindra or any other domestic player?

Suppose Tesla and the GOI can arrive at some common relaxations/investments. In that case, it can't get any better for everyone, including Tata and Mahindra, as they can also grow due to overall improvement in the ecosystem. It's premium manufacturers like BMW/ Mercedes who should be worried. Few will buy an iX at 1,2 Cr against a Model Y at 60-70 lac(assuming). This will also force others to set up local production. I don't see harm to existing EV manufacturers in any way.

Completely agree. I was thinking, was that the sole reason to say No to “BYD” to protect our domestic players ?

[kosjam]

Originally Posted by Turbanator

After whatever concessions are being discussed, the cheapest Tesla won't be less than 40-50 Lac.

How does it affect TATA/ Mahindra or any other domestic player?

Suppose Tesla and the GOI can arrive at some common relaxations/investments. In that case, it can't get any better for everyone, including Tata and Mahindra, as they can also grow due to overall improvement in the ecosystem. It's premium manufacturers like BMW/ Mercedes who should be worried. Few will buy an iX at 1,2 Cr against a Model Y at 60-70 lac(assuming). This will also force others to set up local production. I don't see harm to existing EV manufacturers in any way.

First of all, there cannot be relaxations/investments with any particular company, it would scream of scams/favouritism by the Indian companies. (I won't even touch the political mudslinging)

Secondly, in an EV, the only point of differentiation between the high end and lower end cars is the luxury component, and some basic technologies, for example the axial flux motors in higher end cars vs the conventional motors for the mass market cars. In an item where the number of unique parts has reduced by a factor of 100 at the very least, what is the need for relaxation of duty, unless they (Tesla) have an oversupply somewhere which they want to get rid of? (Read - China)

The point that the cheapest Tesla car is going to priced at 40-50 lac would be erroneous because these cars are not being manufactured in a country like India where the cost of production is much lesser than developed countries where Tesla is actually manufacturing its cars (Exception being China, which in itself is a slight outlier).
Tesla knows that if it has to be successful in a country like India, it needs mass market appeal, and they can easily target the 15-20 L price segment basis the above mentioned points. This would be the reason why Tata/Mahindra would oppose the preferential treatment if given to Tesla.

My two bits...

[Turbanator]

Originally Posted by kosjam

First of all, there cannot be relaxations/investments with any particular company

First of all, it's all speculation If this happens, it's not just for Tesla, anyone can do it- BMW, Mercedes, Volvo or Toyota. You are allowed to import a certain value/ number of cars before you set up the factory, subject to a guaranteed investment of "X" amount or proportionate to how much you can import. And that's exactly what Tesla has been asking for years. Look at the upcoming ecosystem in the mobile and chip manufacturing space where GOI is giving massive subsidies. Here, manufacturers are asking for relaxation on duties for a certain time, with no subsidies.

in an EV, the only point of differentiation between the high end and lower end cars is the luxury component, and some basic technologies, for example the axial flux motors in higher end cars vs the conventional motors for the mass market cars.

You couldn't be more wrong; otherwise, TATA would have been exporting 15,000 USD Nexons everywhere by now

I these cars are not being manufactured in a country like India where the cost of production is much lesser than developed countries where Tesla is actually manufacturing its cars (Exception being China, which in itself is a slight outlier)

Maybe someone knowledgeable or good with data can provide you with some researched figures; EV manufacturing, in my opinion, should be at least 25-40% less labour-intensive.

Tesla knows that if it has to be successful in a country like India, it needs mass market appeal, and they can easily target the 15-20 L price segment basis the above mentioned points.

Tesla at 20K USD after reduced duties/ GST can be a dream that probably the share market can see or someone who has no idea how much it costs to build factories and produce something like a Model 3 or Y. Even manufacturers like Tata, who know all the tricks in the trade, cannot manufacture a sedan of the size of Model 3 with similar range and power at less than 30Lac; they would have been doing this already. Few people will buy a 30 Lac Tata but will happily pay a 45 Lac to Tesla. This is a fact and will take many more years before Tata can reach that level.

[ferrarirules]

Originally Posted by volkman10

We have to see how it pans out as the statement is vague, but stock market reacts sharply.

Sorry I didn't understand what is vague about the statement "Finance Minister Nirmala Sitharaman on Friday said that there is no proposal before the ministry to lower import duty on electric vehicles". This was in direct response to the question referencing the reuters article.

The statement from reuters article is what is called hearsay

India is working on a new electric vehicle policy that would slash import taxes for automakers that commit to some local manufacturing, following a proposal by Tesla (TSLA.O) which is considering entering the domestic market, people with direct knowledge said.

One article is quoting the finance minister where as other is quoting "people with direct knowledge". My intention was to keep the forum informed of the facts and have a rounded opinion.

Rest the stock market was already negative since yesterday. Any news can be peddled to bring further negative sentiment. Also, why will Tata be worried about Tesla. If I pick the price of Model 3 in US and apply the alleged import duty, the price comes to 35 lakhs in India landed. Way beyond Tata's price band.

[extreme_torque]

Originally Posted by Turbanator

After whatever concessions are being discussed, the cheapest Tesla won't be less than 40-50 Lac.

The reduction in duties as i understand is for companies like Tesla to test waters before they commit to a gigafactory investment in India. If that happens, I dont think even Tesla is looking at volumes for Model 3 and Y, it would be the so called $25k Tesla which is fairly affordable.

Originally Posted by Turbanator

How does it affect TATA/ Mahindra or any other domestic player?

$25k Tesla changes the argument completely. An Rs 18 lakh Tata or Mahindra or a Rs 21 lakh Tesla? It is why I am a proponent of vertical integration and inhouse IP not only for motors and batteries but also manufacturing. Tesla is already using front and rear megacasting and a structural battery pack essentially reducing the car into three big component parts. Imagine the capex saved in not requiring weld robots to weld each individual parts plus stamping machines to get those parts out in first place vs a single machine producing a huge car for the entire front end of the car, factory space for a given production capacity, speed of manufacturing. Tata and Mahindra should be really worried if Tesla comes in.

Originally Posted by Turbanator

It's premium manufacturers like BMW/ Mercedes who should be worried. Few will buy an iX at 1,2 Cr against a Model Y at 60-70 lac(assuming). This will also force others to set up local production. I don't see harm to existing EV manufacturers in any way.

On the contrary, luxury manufacturers do not have to match Tesla pricing and therefore will be less effected.

[Turbanator]

As I mentioned before, we can continue to dream about 25K USD EV from Tesla being sold here at 20 lac. Another thread talks about US prices and how the lowest car is now around 17-18 K. A new Corolla is 25K plus. We will talk about this when there is an actual car to discuss.

And regarding luxury cars being non-affected by Tesla, if the difference is so large due to the duties, most Germans won’t have double-digit sales.

But currently, everything is speculation; we don’t know anything. A 25K USD car Tesla on "Twitter" eating market share of Tata Nexon after 15% customs duties proposed on "Reuters"

[extreme_torque]

Originally Posted by Turbanator

As I mentioned before, we can continue to dream about 25K USD EV from Tesla being sold here at 20 lac. Another thread talks about US prices and how the lowest car is now around 17-18 K. A new Corolla is 25K plus. We will talk about this when there is an actual car to discuss.

If it is manufactured in India at scale, I dont see why it cant be. With local manufacturing there would no difference between a tata/mahindra and a tesla when it comes to taxation.

[Turbanator]

Originally Posted by extreme_torque

If it is manufactured in India at scale, I dont see why it cant be. With local manufacturing there would no difference between a tata/mahindra and a tesla when it comes to taxation.

So what's the problem if that happens? Why should we customers be left to buy only poorly assembled products by local manufacturers? Can someone who operates globally not come and manufacture? What they ask is hand-holding for a while and no subsidies- right?

You seem to agree that they cannot sell imported products at Tata/ Mahindra rates, but once they set up plants, they can compete. I see no harm in that, or should we continue to keep barriers and let ourselves served with Nexon and whatnot? I would have appreciated the policy if I were responsible for something at Tata. Tata should become India's BYD, which can happen only when they produce here and not assemble kits from China. This is probably old, you can google what & how Tesla does.

https://www.reuters.com/article/tata...dTRNIKCN2MN10A

But, as I mentioned, all this is pointless. If someone really thinks Tesla is going to compete with Tata/ Mahindra, I can only feel

[extreme_torque]

Originally Posted by Turbanator

So what's the problem if that happens? Why should we customers be left to buy only poorly assembled products by local manufacturers? Can someone who operates globally not come and manufacture? What they ask is hand-holding for a while and no subsidies- right?

I am not saying it is a problem. Not at all infact. I am only replying to your conjecture that Tesla will be selling 40lakh+ cars here after setting up local manufacturing. Or that they wont complete in the same segment as Tata or Mahindra.

Originally Posted by Turbanator

You seem to agree that they cannot sell imported products at Tata/ Mahindra rates, but once they set up plants, they can compete.

Tata/Mahindra do not have anything that competes with Model Y or 3 at present. The so called $25k Tesla surely can and will compete with Tata/Mahindra but not if it is imported with 100% duty on top. If Tesla does decide to set up manufacturing in India, leveling the playing field, Tata/Mahindra would find it very hard to compete.

Originally Posted by Turbanator

I see no harm in that, or should we continue to keep barriers and let ourselves served with Nexon and whatnot? I would have appreciated the policy if I were responsible for something at Tata. Tata should become India's BYD, which can happen only when they produce here and not assemble kits from China. This is probably old, you can google what & how Tesla does.

But, as I mentioned, all this is pointless. If someone really thinks Tesla is going to compete with Tata/ Mahindra, I can only feel

I dont see where the diagreement is. Although Tesla competing with Mahindra/Tata isnt as far fetched as it seems given their future plans. I also feel that Tata is better placed than Mahindra in the EV space given their headstart in India as well as access to Jagaur/Land Rover IP in the same space. To be able to compete with Tesla, they not only need IP for their own powertrain but also manufacturing at scale.

FYI, Model 3 is already priced very close to $25k in China. Tesla aim is to reduce manufacturing costs by 50% for their next volume model and they have already outlined how they plan to achieve that. I know the car does not exist yet but imagine a truly capable EV which can be sold for $25k with 20-30% margins and you get the idea.

[ferrarirules]

Originally Posted by extreme_torque

FYI, Model 3 is already priced very close to $25k in China. Tesla aim is to reduce manufacturing costs by 50% for their next volume model and they have already outlined how they plan to achieve that. I know the car does not exist yet but imagine a truly capable EV which can be sold for $25k with 20-30% margins and you get the idea.

No it is not being sold any where close to $25k. A recent article from May-2023, pegs the price at 231,900 Chinese yuan ($33,549.86)

At this price adding the supposedly reduced import duty of 15%. The price in India landed will be $38582 which will be near about 32 lakh rupees. That price will be Atto 3 territory not Tata/Mahindra territory.

In China, Tesla’s Model 3 now costs 231,900 Chinese yuan ($33,549.86), up from the previous price of 229,900 yuan, according to the company’s website.

Source -cnbc- link

[extreme_torque]

Originally Posted by ferrarirules

No it is not being sold any where close to $25k. A recent article from May-2023, pegs the price at 231,900 Chinese yuan ($33,549.86)

My bad. I looked up the current price of the Model 3 on Tesla's website and it is now 231000 yuan or approx $31k

Originally Posted by ferrarirules

At this price adding the supposedly reduced import duty of 15%. The price in India landed will be $38582 which will be near about 32 lakh rupees. That price will be Atto 3 territory not Tata/Mahindra territory.

I never said Tesla is planning to sell 3 or Y at Tata/Mahindra prices. Its for the upcoming Model 2 which is supposedly their volume model for developing economies and costs them 50% less to build. Extrapolating Chinese Model 3 pricing, it will cost Tesla well below $20k manufacture and will still sell at a decent margin even at $25k retail (remember there is no middlemen aka dealers)
https://www.teslarati.com/tesla-giga...1-2025-report/