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Preferential Treatment for Elon Musk's Tesla Not in India's Best Interests: Ola CEO Bhavish Aggarwal

By: Auto Desk

News18.com

Last Updated: July 04, 2022, 15:16 IST

New Delhi

Bhavish Aggarwal, CEO and co-founder of Ola, poses in front of an Ola cab in Mumbai. (Reuters/File)

Bhavish Aggarwal, CEO and co-founder of Ola, poses in front of an Ola cab in Mumbai. (Reuters/File)

CEO Elon Musk has said that Tesla will not open a manufacturing plant in India until it is first allowed to sell and service imported cars in the country

Giving Tesla special benefits in India would not be in the nation’s best interests since the government has been striving to spur the development of domestic leaders in the electric vehicle industry, Ola founder and CEO Bhavish Aggarwal has said.

“Tesla is free to come in and put up shop here and sell its cars. [But] They just want to be treated differently from others, which I believe is not in the interests of India,” Financial Times quoted Aggarwal as saying.

In May, Tesla CEO Elon Musk, while responding to a tweet, had said that the company will not open a manufacturing plant in India until it is first allowed to sell and service imported cars in the country. “Tesla will not put a manufacturing plant in any location where we are not allowed first to sell and service cars.”

The American auto giant and India have been discussing whether there is a way for the electric carmaker to enter the country for almost two years.

Union Minister for Road Transport and Highways Nitin Gadkari has stated that if Tesla is ready to manufacture its EVs in India, there will be “no problem”, but the company must not import cars from China. “Come to India, start manufacturing,” he said.

In February, Tesla’s call for lower taxes to import EVs was rejected by the government and it was said that existing rules allow partially built automobiles to be imported and assembled locally for a lower charge.

But when it comes to China, Tesla not only achieved major success but also aided in the growth of the country’s emerging sector.

Gadkari said in April that if the auto giant manufactures its vehicles in India, the company will gain and since “India is a large market, they can export from India”. However, Beijing gave the company tax advantages and low-interest loans as reward for its contribution.

Many foreign automakers have failed in India, despite the fact that Maruti Suzuki, a subsidiary of Japan’s Suzuki, sells more passenger cars than any other firm.

Ford, another major US automaker, made the decision to cease production in India in September following years of significant operating losses and the granting of bail to its top directors in India in a case involving alleged cheating.

In the case of Ola, it has launched S1 and S1 Pro. But the company had to recall the batch of 1,400 electric scooters in March after one of them caught fire.

Aggarwal called the incident “isolated” and stated that “in very, very rare cases this can happen as it has happened with other manufacturers of other EVs”.

As per the report by Financial Times, Aggarwal claimed Ola was cooperating with a government probe into electric scooter fires.

The Indian automobile industry is the world’s fifth-largest and is anticipated to become the third-largest by 2030. According to the India Energy Storage Alliance (IESA), the Indian EV sector would grow at a CAGR of 36%.

By 2030, NITI Aayog hopes to reach EV sales penetration of 70% for all commercial vehicles, 30% for private vehicles, 40% for buses, and 80% for two and three-wheelers. This is consistent with the objective of reaching net-zero carbon emissions by 2070.

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first published:July 04, 2022, 15:16 IST
last updated:July 04, 2022, 15:16 IST