Lowering import duty on e-vehicles: Ola’s Aggarwal ‘strongly disagrees’ with Musk’s call

Sangeetha Chengappa Bengaluru | Updated on July 28, 2021

Bhavish Aggarwal, founder of Ola Electric

Says must build locally, not just import vehicles

In a strong comeback to Tesla founder Elon Musk’s call for lower duties on imported EVs, and echoed also by Hyundai MD S S Kim, Bhavish Aggarwal, founder of Ola Electric, which is building the world’s largest two-wheeler factory in Tamil Nadu, said he “strongly disagrees with both (their statements)”.

“Let us have confidence in our ability to build indigenously and also attract global OEMs to build in India, not just import. We won’t be the first country to do so,” tweeted Aggarwal on Tuesday, giving an early indication of the kind of resistance Musk’s proposal might receive from domestic EV manufacturers.

‘Highest’ duty

Last week, Tesla founder Elon Musk said his company wants to launch electric vehicles in India but said the import duties are the highest by far for any large country. “Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India,” he had tweeted in response to a question about launching Tesla cars in India.

Musk is hoping for temporary tariff relief for electric vehicles in India. Echoing Musk, Hyundai MD SS Kim said: “Lower duties will help grow the EV market.” Incidentally, Hyundai Motor Company and Kia Motors are early investors in Ola Electric. Hyundai has also invested around $300 million in Ola Cabs for a 4 per cent stake.

‘Build in India’

Echoing the sentiments of Aggarwal, Suhas Rajkumar, Founder-CEO of Simple Energy, a Bengaluru-based electric two-wheeler manufacturer, said that ‘Build in India’ is the way forward for the EV industry. “Although lowering the import duty will welcome global players, the industry needs to take our nation and talent to a global standard which will be possible by supporting ‘build in India’ and not just reducing the import duties,” he said. Hero Electric and Ather Energy, two other large EV players, were not available for comment.

India imposes 100 per cent Customs duty on fully-built imported cars with CIF (Cost, Insurance and Freight) value more than $40,000, and at 60 per cent on those costing less than the amount.

Twitterati responded vociferously with, “why wud (sic) such a huge country (India) import cars when it has the resources to build one. It doesn’t make sense.”

“If they believe in the India story, they should invest here. Can’t be friends for benefits.”

“Import duties won’t be cut down just to bring Tesla to India.”

However, some disagreed with Aggarwal, tweeting, “It is very obvious that you’ll disagree... import duties should definitely be reduced... Also, domestic capabilities need to be built... but import duty reduction will bring in foreign brands and increase competition... Good for the consumer.”

Two weeks ago, when Ola Electric opened reservations for its electric scooter, Aggarwal had said that “India has the opportunity and potential to become the world leader in EVs and at Ola, we are proud to lead this charge,” making his aspirations for Ola Electric clear.

Aggarwal’s is investing around ₹2,500 crore in Ola Electric. Its ‘Futurefactory’, being near Krishnagiri in Tamil Nadu, is nearing completion.

In a welcome move for the industry, the Government has cut GST on electric vehicles from 12 per cent to 5 per cent, and that on chargers and charging stations from 18 per cent to 5 per cent.

Published on July 27, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like