Is the Government Favoring Tesla

India's electric vehicle market pioneers Tata & Mahindra are now facing more competition as the Government of India changes EV import policies which seem to be a way for global brands like Tesla. Although Tata and Mahindra have played an important role in the popularization of EVs in India due to affordable and fuel efficient vehicles, the change of policy makes one wonder how long the government will continue to support domestic manufacturers. India has recently announced a major cut in EV import duties ahead of Prime Minister Narendra Modi's visit to the U.S. and his meeting with Tesla CEO Elon Musk, from 110 per cent to 15 per cent. It looks like this policy is meant to encourage electric vehicle manufacturers from abroad, including Tesla, while at the same time putting more pressure on domestic brands Tata & Mahindra. The new rules require companies to make a Rs. 4,150 crore investment and achieve a Rs. 2,500 crore turnover in their second year of operation. EVs approved under the new import policy can import up to 8,000 EVs annually if the car is more than $35,000 and pays the reduced tariff. While this is good news for international brands, especially Tesla which is planning to launch an EV worth Rs. 21 lakh and is likely to pose a challenge to Tata & Mahindra in their respective segments. Also, Tesla is preparing to establish its presence in Mumbai and Delhi and is aiming its sales at the metropolitan areas of Mumbai, Delhi and Bangalore. As this strategy promotes the growth of EVs in India, the domestic auto makers such as Tata & Mahindra may have to come up with innovative strategies to keep their dominance in the market. The current EV market trends are not only complicated but also quite fascinating for both opponents and supporters of Tata & Mahindra as they try to figure out how to act in this environment.

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