Mahindra urges fair competition amid Tesla's India entry plans

Mahindra & Mahindra has stressed the need for fair competition between domestic and international players as the government seeks to attract global EV manufacturers, including Tesla, Reuters reported.

In an exclusive interview at the World Economic Forum annual meeting, Mahindra's Managing Director, Anish Shah, highlighted the importance of promoting local manufacturing and creating a robust industry within India.

Mahindra, along with Tata Motors, has privately urged Indian officials not to reduce the existing 100 per cent import taxes on electric vehicles.

This move is aimed at protecting domestic firms and their foreign investors as the government evaluates Tesla's plans to enter the Indian market, according to a report by Reuters last month.

Speaking about the issue, Anish Shah stated, "It should be a level playing field, and investing in India is important." While not explicitly mentioning Tesla, he emphasised the need for global EV manufacturers to invest in India to strengthen the domestic industry.

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Shah highlighted the company's approach, which focusses on preventing a scenario where manufacturing is outsourced, turning India into merely an importer of products.

India's automotive sector witnessed the sale of 4 million cars last year, with only 82,000 being electric vehicles. Despite the small share, the EV segment demonstrated significant growth, recording a sales increase of 115 per cent compared to the previous year.

Mahindra, in its efforts to boost the EV sector, secured approximately $400 million in funding from Singapore's Temasek and British International Investment.

Shah revealed plans for Mahindra to list its EV unit but indicated that this move would not happen before 2029, stating, "For us, electric is the future, and we need to be able to show significant success in that business."

In contrast to Mahindra's stance, Tesla has proposed the establishment of a manufacturing facility in India and has requested lower import taxes for electric cars.

Media reports suggest that India is working on a new policy to reduce import taxes on EVs to as low as 15 per cent, provided companies commit to some level of local manufacturing.

However, concerns have arisen within the Indian industry, with sources indicating that Tesla's entry could pose a risk to future fundraising for Indian EV companies.

A stable and favourable import tax regime is seen as crucial for the growth and sustainability of the domestic EV sector.

The government's decision in this matter will undoubtedly play a huge role in shaping the future landscape of the electric vehicle market in India.