India Leans Toward EV Tariff Cuts? Tesla Watches Closely

Though, according to reports, automakers in India are asking the government to delay tariff cuts till 2029 and then phase in a reduction to 30 per cent from as high as 100 per cent, EVs are believed to be first under the scanner for a tariff slash.

By Bureau Thu, 03 Apr 2025 19:06:25 IST

Despite opposition from local automakers such as Tata Motors and Mahindra & Mahindra, the Indian government is planning to lower import tariffs on electric vehicles (EVs).

Since the electric passenger vehicle industry is still in a nascent stage of growth, lowering the import tariffs will hit the local automakers the most. American President Donald Trump has been very vocal about the high import duties imposed by India that have impacted manufacturing operations by American automakers like Harley-Davidson in particular.

According to reports, automakers in India are asking the government to delay tariff cuts till 2029 and then phase in a reduction to 30 per cent from as high as 100 per cent.

But with the bilateral trade pact between the United States and India currently under negotiation, EVs are believed to be first under the scanner for a tariff slash.

Importantly, US electric carmaker Tesla Inc. has plans to start selling its models in India this year and has already leased showroom space in Mumbai and Delhi. According to reports, Tesla is looking to import its lower priced models from its Berlin Giga factory instead of China. India has strained bilateral relations with China and all capital investments from the Asian neighbour have to pass through a rigorous regulatory clearance before receiving approval.

The reduction in import duties on EVs will particularly benefit Tesla but may impact sales of the recently launched Mahindra BE6 and XEV9e. Prices of these EVs starts at Rs 18.90 lakh going upwards to over Rs 30 lakh.

Maruti Suzuki will be launching its electric e-Vitara this year in the same segment as the Mahindra BE6 and is expected to price it around Rs 17 to Rs 22 lakh. The Tata Harrier electric coming this year is likely to cost around Rs 24 lakh.

Tesla is believed to be looking at bringing an entry model in the price range of $25000 (around Rs 22 lakh) to India. At present, Tesla’s entry car Model 3 is pegged at Rs 35 lakh ($40,000) globally.

With a trimming of import duties, Tesla’s models just could give automakers in India a run for their money on the electric front adding to both competition and a wider array of choices for the consumers.