Tesla Gets Volkswagen Backing In Calling For India To Slash Heavy Import Taxes On EVs

Volkswagen AG VWAGY has joined Tesla Inc. TSLA in urging India to lower import duties on electric cars, Reuters reported Tuesday.

What Happened: Gurpratap Boparai, managing director of Skoda Auto Volkswagen India, told Reuters in an interview that the reduction in import duties to even 25% from the current levels of as high as 100% would not pose a “big threat” to domestic players.

Volkswagen is planning for electric vehicles from its Volkswagen and Skoda brands to enter the Indian market, but the German automaker will first need to see lower import duties, Boparai was quoted as saying.  

See Also: Camouflaged Tesla Model 3 Seen Testing In India

Why It Matters: Elon Musk-led Tesla has been lobbying to get the import duty on fully-assembled EVs slashed to 40%. The electric vehicle maker believes it can price its EVs competitively if the Indian government accepts its request.

The currently applicable import duty in India is 60% on cars priced below $40,000 and 100% for those above the price ceiling.

However, India has refused to reduce the import duty, based on the government's policy of promoting domestic production.

Price Action: Volkswagen OTC shares closed 0.3% higher in Tuesday’s trading at $34.91, while Tesla shares closed 0.5% lower at $709.99.

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