Hey Elon , What is so difficult ?
A few weeks back, you asked Indian government to reduce import duty on bringing and selling in India EVs
You asked duty on fully assembled Electric Cars, to be brought down from 60 % to 40 % ( presumably for your Model 3 which sells for $ 39,990 in USA )
Indian Government has repeatedly asked you ( for past 4 years ? ) :
What is your “ Phased Manufacturing Program “ ?
Context :
Govt lays out terms before weighing Tesla’s tax demands / Hindustan Times / 14 Aug 2021
Extract :
The government has asked Tesla Inc. to ramp up local procurement and share detailed manufacturing plans before the carmaker’s demands for lower taxes on electric vehicles are considered
The Ministries of Heavy Industries and Finance sought the details from Tesla in a meeting earlier this month even as the government is examines billionaire Elon Musk’s demand for lower taxes on EVs in Asia’s third largest economy
The departments have also asked Tesla for its thoughts on importing fully built cars versus so called “ knocked down units “ or partially built vehicles, which attract lower import levy
Tesla didn’t respond to requests for comment
Tesla wrote to the government in July asking for the import duty on electric cars to be reduced to 40 % from the current 60 % to 100 %
The company also asked for the 10 % social welfare surcharge – which is levied on all imported cars and helps fund health and education programs – to be scrapped
At the meeting, Tesla claimed it has procured components worth $ 100 million so far from India and suggested that figure would increase following any tax concessions
My Take :
4 YEARS ago, through my following E Mail, I urged Tesla to submit its “ Phased Manufacturing Program “ to GOI – just like any other Foreign Company wanting to set-up a manufacturing facility in India :
Will Tesla follow Apple ? …………………………………[ 23 May 2017 ]
In that e-mail, I did not say anything about year-wise and cumulative, “ local value addition “, through locally purchased or “ In-house manufactured “ , components / sub-assemblies
Obviously, GOI would want any Foreign Manufacturer to gradually increase “ local value addition “, to take it to ( say ), 90 % over a 5 Year period , leaving only 10 % ( by value ) imported items at the end of 5 years
I urge, Tesla to examine following program – and if feasible send it (with changes if required ), to GOI
This could form a basis for further discussions / finalization
If an agreement is reached, it would serve as a BENCH-MARK for all other Foreign Manufacturers wanting to make / sell, electric vehicles in India
Tesla to commit to following PHASED MANUFACTURING PROGRAM for making Model 3 in India
Year ( Ap-Mar) | Items to be procured locally | Value Addition % ( For the Year ) | Value Addition % ( Cumulative ) |
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22 - 23 | NIL ( Import of fully assembled cars ) | - | - |
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23 - 24 | KDU – Knocked Down Units ( Add Assy Hours ) | 5 | 5 |
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24 - 25 | Tyres / Chasis / Body / Electricals / Windows / Dashboards ..etc | 10 | 15 |
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25 - 26 | Li-ion Battery | 40 | 55 |
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26 - 27 | Sensors - Cameras – GPS locators | 15 | 70 |
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27 - 28 | Autonomous Navigation Devices ( Radar – Lidar ) | 20 | 90 |
NOTES :
Above mentioned list of components / sub-assys / Assys etc., is only illustrative. Tesla may expand
For each component / sub-assy.,Tesla would need to provide CIF prices ( $ and Rs ), if imported , and providing names of its own current suppliers of each ( country-wise )
Value Addition must be shown as a percentage of the final Ex-Factory selling price of Model 3
In case of depreciation of Rupee vis-à-vis Dollar , local value addition must not suffer ( get reduced )
Tesla should file with GOI, a quarterly RETURN , showing current value addition and cars sold
Dear Elon ( press@tesla.com ),
You claim that Tesla purchased from India, parts worth $ 100 million, SO FAR
Assuming that these purchase covered past 2 years, that works out to $ 50 million / year
I further assume that , during 2022 – 23, you will import / sell some 5,000 Model 3 in India, for a total CIF value of $ 200 million ( @ $ 40,000 per car )
Dividing $ 50 million by $ 200 million = 25 %
Goes to show that, if the same parts were used for “ locally assembled “ cars, it would amount to a “ local value addition “ of ( as high as ) 25 % , in the very FIRST YEAR itself !
I urge your Business Development Team, to go through my following earlier e-mails to help formulate your ENTRY STRATEGY for India
With regards,
Hemen Parekh / hcp@RecruitGuru.com / 15 Aug 2021
Earlier E Mails :
Welcome ! Elon Musk………………………………………….. [ 10 Feb 2017 ]
From ELON to ION ………………………………………………..[ 11 May 2017 ]
ENABLE ELON TO CATALYSE ! ……………………………..[ 15 June 2017 ]
Is it NOW or NEVER ? …………………………………………..[ 23 June 2017 ]
Elon : Hesitation Can Hurt ! …………………………………[ 03 July 2017 ]
Elon : Widow Opens(Door is not closed, either)…..[ 07 July 2017 ]
India : Energy Storage Mission …………………………….[ 04 Dec 2017 ]
A Phased Manufacturing Program ?.................[ 23 Apr 2018 ]
ARA & M Ltd ?.............................
Fastest Finger First ?.............................
The Race is on ! ………………………………………….[ 23 Oct 2020 ]
Enough to entice Elon ? ………………………………………..[ 03 Nov 2020 ]
Luck does not happen ! ………………………………………….[ 04 Nov 2020 ]
Musk may not care……………………………………… [ 16 Nov 2020 ]
To beat OR not to beat ?.............................
At long last, TESLA is here ! ……………………………………[ 13 Jan 2021 ]
Elementary, my dear Watson ! ………………………..[ 17 Jan 2021 ]
Elon Musk : We offer a GREEN CARPET ……………..[ 03 Mar 2021 ]
Can TESLA beat MATAM ? ……………………………………….[ 24 July 2021 ]
Hey, Elon seems to have a case ! ……………………………[ 27 July 2021 ]
Import Duties : Time to get Rational………………… [ 27 July 2021 ]
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