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Indian automakers Tata Motors and Mahindra & Mahindrais (OTC:MAHMF) are reportedly pressing Indian officials to keep import taxes on electric vehicles at their current levels in order to protect the domestic industry and its investors. The issue has increased significance with Tesla (NASDAQ:TSLA) in active negotiations with the government to qualify for lower import taxes if it enters the market.
India wants Tesla (TSLA) to set up local manufacturing plant in order to qualify for an import taxes on electric vehicles as low as 15% for companies committing to some local manufacturing. However, the Indian automakers have told Prime Narendra Modi’s office and other departments that their investors already made decisions assuming the tax regime would favor domestic companies.
Modi’s government has a stated goal for 30% of annual car sales in India to be electric after 2030 compared to the current level of just 2%. Currently, Tata Motors dominates the local electric vehicle industry with about 74% market share. Analysts think support from outside companies would be the most efficient way for India to build out electric vehicle charging infrastructure.
Shares of Tesla (TSLA) edged 0.45% higher in early afternoon trading on Thursday.