Relations between Tesla and India seem to be improving, as the country’s Commerce and Industry Minister Piyush Goyal has said the electric vehicle giant will source around $1.9 billion worth of auto parts from the nation in 2023, BNN Bloomberg reported.
There have been tensions between the two parties after Tesla CEO Elon Musk called on the Indian government to reduce import tax on vehicles from 100% to 40%, according to Business Today. That levy applies to vehicles that cost more than $40,000, so many of Tesla’s models would be affected.
But criticism was lobbed in the other direction, with India’s Union Minister for Road Transport and Highways Nitin Gadkari requesting that Tesla not sell cars in India that were made in China, per Business Today.
Regarding whether India would consider reducing taxes on imported EVs per Tesla’s demand, Goyal said, “We will come out with a policy which will be in consultation with all stakeholders.”
The suggestion that Tesla will now source more of its car parts from India signals a softening of the relationship, although Tesla still bought around $1 billion in components from the country in 2022, according to BNN Bloomberg.
A further sign of an olive branch being extended comes from the news that Tesla is considering making and selling its “Powerwall” battery storage systems in India, as Reuters reported. Meanwhile, the outlet also noted there are still talks to build an EV factory in India for cars that will retail at around $24,000.
It all seems to be great news for India, which has already seen significant reductions in pollution in the last few years. According to a United Nations assessment, as summarized by Reuters, the country’s planet-warming pollution has dropped by 33% in about 14 years.
This reduction has been achieved by increased forest cover, using alternative fuels, and targeting pollution caused by industrial, automotive, and energy sectors.
In April, the country announced that all new vehicles sold would be tested for real driving pollution, as DownToEarth reported. Since Tesla vehicles produce zero tailpipe pollution, they should be a welcome addition to the country’s automotive market.
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