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Indian EV Landscape: Mahindra Calls for Balance as Tesla Eyes Entry

As India welcomes Tesla and other global electric vehicle giants, Mahindra & Mahindra, alongside Tata Motors, voices concerns to the Indian government, emphasizing the need to maintain fair competition and protect domestic investments

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The Indian automaker Mahindra & Mahindra has recently expressed concerns to the Indian government about ensuring fair competition as the country looks to attract major electric vehicle manufacturers like Tesla. Mahindra, along with Tata Motors, has privately lobbied officials not to dramatically reduce the 100% import taxes on EVs in order to protect domestic companies who have already invested heavily in local manufacturing and infrastructure.

When asked about Tesla’s plans to enter the Indian market and the government’s proposals to lower EV import taxes, Mahindra Managing Director Anish Shah reiterated the need for policies that encourage foreign automakers to build local production facilities rather than just importing vehicles into India. “There should be a level playing field where everyone competes on merit, and investing in India should be a priority,” Shah said in an interview at the World Economic Forum’s annual meeting. He did not mention Tesla by name.

Shah explained Mahindra’s stance is to strengthen the domestic Indian auto industry rather than rely solely on imports. “We don’t want a situation where manufacturing is done outside India and we just become an importer of products,” he said.

India’s EV market is still in its infancy but growing rapidly, with sales jumping 115% last year even though EVs only accounted for about 2% of the 4 million total car sales. Mahindra and Tata have already attracted significant foreign investment from firms like Singapore’s Temasek, British International Investment, and US private equity giant TPG to fund their EV efforts.

Shah noted Mahindra has plans to eventually list its EV division as a standalone company, but not before 2029. He said this timeline will allow the business to demonstrate substantial success before going public. “For us, electric is the future,” Shah said, signaling Mahindra’s long-term commitment to EVs.

Tesla has proposed an Indian gigafactory but also wants import taxes lowered to as little as 15% for companies that commit to local manufacturing. While attractive for new entrants, sources say Tesla’s proposal has caused concerns among Indian firms that the unstable tax regime could jeopardize future fundraising and investment in domestic manufacturers.

Overall, Mahindra’s stance indicates that veteran Indian automakers want policies that encourage local production and a stable tax environment that allows new and old players alike to compete on a level playing field. With its huge growth potential and role as a global manufacturing hub, India’s policy decisions on EVs in the coming years will have major ramifications across the worldwide auto industry.

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