Tesla Triumphs As India Eases EV Taxes, Rivalry With BYD And VinFast Heats Up: Report

Tesla, Inc.’s TSLA prospects in India may brighten as the country reportedly lowers import taxes on select electric vehicles, incentivizing investments and local manufacturing.

With the development, the EV behemoth secures a significant victory in India as the government aligns with its lobbying efforts, despite resistance from local car manufacturers, Reuters reported.

With the new policy now in effect, eligible companies can immediately import up to 8,000 EVs annually, priced at $35,000 or higher, at a reduced tax rate of 15%. 

The import tax rate on electric vehicles of 15% for a period of five years, contrasts sharply with the previous maximum rate of up to 100%, Reuters added.

Tesla, BYD, And VinFast Compete For India Entry

Presently, India imposes taxes ranging from 70% to 100% on imported EVs, based on their value. In New York, Tesla’s most affordable car, the Model 3, has a starting price of $38,990, Reuters added.

Tesla faces challenges due to a lack of entry-level models and an aging lineup, leading to declining demand amid fierce competition, particularly from BYD Co. BYDDY. 

Meanwhile, BYD’s plans to invest in India are hindered by strict investment regulations. 

Vietnam’s VinFast Auto Ltd. VFS, aiming for reduced EV import taxes, is investing $2 billion in a factory in Tamil Nadu in India, Reuters added.

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Price Action: TSLA shares are trading lower by 0.57% to $161.57 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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