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Ola CEO Says Giving Tesla Special Treatment Isn’t in India’s Interest

Musk has repeatedly asked for a tax break for Tesla so the company can enter the Indian market.

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Tech and Auto
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Ola CEO Says Giving Tesla Special Treatment Isn’t in India’s Interest
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Bhavish Aggarwal, the co-founder and CEO of Ola Cabs and Ola Electric, has weighed in on electric car maker Tesla entering the Indian market.

“Tesla is free to come in and put up a shop here and sell its cars, they just want to be treated differently from others, which I believe is not in the interests of India," he said in an interview with Financial Times.

Tesla, led by Elon Musk, has shown interest in entering the Indian market for a while now, but has not been able to strike a favourable deal with the government.

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'Challenges' With the Indian Government

In January, after Elon Musk said that he was working through certain "challenges" with the Indian government, ministers of various Indian states offered him invitations to set up shop in their states.

These "challenges" refer to the fact that India currently levies an import duty of 100 percent for automobiles worth over $40,000. Even cars less than $40,000 are subject to 60 percent import duty.

Musk has repeatedly asked for a tax break for Tesla so the company can enter the Indian market and keep their prices lower for the price-conscious consumers.

A Bloomberg report from February revealed that the government had imposed the condition that Tesla would only be granted a tax break if it purchased at least $500 million worth of parts from India.

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Tesla's success in China is partly due to the Chinese government giving it privileges, including tax breaks and low-interest loans.

India, however, is taking a different route to EV growth. The government is attempting to boost local manufacturing of EVs and related components by offering production-linked-incentive (PLI) schemes.

Union Minister of Road Transport and Highways Nitin Gadkari said in April that Tesla could only sell cars in India if they also manufactured them in the country. He added that importing cars manufactured in China "would not be a good proposition for India."

Musk has now made it clear, however, that his company will not set up manufacturing plants in India if they are not allowed to sell cars first in order to create demand.

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Ola Working on an Electric Car

Bhavish Aggarwal's statements come at a time when Ola Electric, which is already the country's biggest producer of electric two-wheelers, is working on launching its own electric car.

The company, which began as an online cab-booking service, has grown to be a strong player in the EV arena in India with the Ola Electric S1 scooter becoming one of the best-selling electric vehicles in the country.

India's EV market is largely comprised of two-wheelers, with sales volumes of electric cars being far lower than that of electric bikes and scooters. This may be another reason why Tesla, which has no two-wheeler offerings, is hesitant to enter the Indian market.

Ola's upcoming electric car is estimated to be priced at Rs 8 lakh, according to CarDekho.

Ola is one of the few companies, including Ambani’s Reliance Industries and Hyundai, that won a tender to produce EV battery cells under India’s recent incentive programme to promote electric vehicles.

(With inputs from Bloomberg and CarDekho.)

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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Topics:  Ola   Tesla   Elon Musk 

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Edited By :Tejas Harad
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