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Tata Motors expects govt to be consistent with support for local production of electric vehicles

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on Monday said it expects the government to consistently follow the policy of promoting local manufacturing of electric vehicles (EVs) under the FAME scheme amid demand from Tesla to lower import duty to sell its vehicles in India. The auto major, which plans to have 10 new battery electric vehicles (BEVs) in its domestic product portfolio by 2025, expects the government policy to remain consistent with the policy it has already rolled out for the segment.

“From Tata Motors’ perspective, the Indian government through the FAME II incentives, eligibility criteria have been very clearly set for the direction in which the country should take to accelerate the adoption of EVs. This has always emphasised affordable EVs and also localisation as per the phased manufacturing plans,” Tata Motors CFO P Balaji told reporters in a virtual press meet.

He further said:” I am sure the government will remain consistent to that particular philosophy and the principles of FAME II. This is what all of us are working towards.”

The companies who are investing in the EV segment are looking forward to long-term visibility of the policy, Balaji stated.

“This is what the FAME II scheme and phased manufacturing plan provide. I am sure the government will be consistent with what has already been put out there in the policy,” he noted.

Balaji was responding to a query on Tata Motors’ standpoint on the demand by US electric car major Tesla to cut import duties on imported units.

Tesla has demanded a reduction in import duties on electric vehicles (EVs) in India.

At present, cars imported as completely built units (CBUs) attract customs duty ranging from 60 per cent to 100 per cent, depending on engine size and cost, insurance and freight (CIF) value less or above USD 40,000.

Last week Tesla Chief Executive Officer Elon Musk had said that the company may set up a manufacturing unit in India if it first succeeds with imported vehicles in the country.

He, however, said at present import duties in India are “the highest in the world” and is hoping for “at least a temporary tariff relief for electric vehicles”.

Interacting on Twitter with followers who asked him to launch Tesla cars in India Musk said, “We want to do so, but import duties are the highest in the world by far of any large country!”

Musk further said, “Clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India.”

He, however, said, “We are hopeful that there will be at least a temporary tariff relief for electric vehicles. That would be much appreciated.”

Asked by a follower if Tesla could start with local assembly in India, Musk said, “If Tesla is able to succeed with imported vehicles, then a factory in India is quite likely.”

Balaji also confirmed the company’s plans regarding coming up with scrapping units in the country.

“As far as scrapping units are concerned, we are in conversation with our dealers and others in the extended ecosystem and therefore we would be helping them to set it up. The technology would be from the company while capital will be theirs,” he noted.

The auto major would start with at least 2-4 units in various parts of the country and would scale it to around 10 ten units over a period of time, he added.

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