Mahindra demands fair competition in EV market as Tesla plans entry into India

Indian automaker Mahindra & Mahindra has highlighted the need for a level playing field between domestic and foreign players and the promotion of local manufacturing, according to a top executive. This comes as the Indian government seeks to attract carmakers like Tesla.

Both Mahindra and Tata Motors have privately urged Indian officials not to reduce the 100 percent import taxes on electric vehicles and to protect domestic companies and their foreign investors. This is occurring as the government reviews Tesla’s plans to enter the market, as per a Reuters report from last month.

In response to Tesla’s potential entry and New Delhi’s proposed policy to reduce import taxes, Mahindra Managing Director Anish Shah stated that the company has made representations to Indian officials, emphasizing the importance of nudging global EV makers to invest in India.

“It is crucial to create a level playing field and to encourage investments in India,” Shah told Reuters during an interview at the World Economic Forum annual meeting, without explicitly mentioning Tesla.

“Our goal is to build a robust industry in India, rather than becoming a mere importer of products as manufacturing moves outside the country,” he added.

India saw the sale of 4 million cars last year, with only 82,000 of those being EVs. However, the emerging segment recorded a sales growth of 115 percent compared to the previous year.

Mahindra has secured approximately $400 million (roughly Rs. 3,325 crore) from Singapore’s Temasek and British International Investment, while private equity firm TPG and Abu Dhabi state holding company ADQ invested $1 billion (roughly Rs. 8,312 crore) in Tata in 2021.

Shah stated that Mahindra has intentions to list its EV unit, but not before 2029 “because we need to demonstrate significant success in that business first.”

“For us, electric is the future,” he emphasized.

Tesla has put forward a proposal to establish a factory in India but has also requested lower import taxes for electric cars. India is currently working on a new policy to reduce import taxes on EVs to as low as 15 percent for companies committed to some local manufacturing, as reported by Reuters.

However, this has raised concerns within the Indian industry, as sources indicate that Tesla’s entry could jeopardize the future fundraising of Indian EV companies, which rely on a stable and favorable import tax regime.

© Thomson Reuters 2024

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In conclusion, Mahindra’s call for an electric vehicle (EV) level playing field in India is a crucial step towards the advancement of the country’s sustainable transportation industry. As Tesla announces its plans to enter the Indian market, Mahindra’s demand for equal treatment of local and global players in the EV sector is a necessary move to ensure fairness and competitiveness. It is evident that a balanced regulatory framework and support for domestic EV manufacturers will be essential for India’s transition towards a cleaner and greener mobility ecosystem. Mahindra’s initiative can pave the way for a more inclusive and thriving EV market in India.

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