Tesla Gets $153 Million In Incentives For Factory In Mexico Even As India Entry Plans Hang On Tenterhooks

While Tesla's India plans were put in jeopardy after the Indian government earlier this week denied any proposal to provide duty concessions for the import of its EVs, Elon Musk's company gets a big offer from American neighbours, Mexico. The northern state of Nuevo Leon in Mexico has approved $153 million in incentives for Tesla as the American EV manufacturer is planning to build a factory there. The incentives, worth 2.627 billion pesos ($152.86 million) and approved by a state economic development council, include a reduction in Tesla's payroll tax.

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The Nuevo Leon state government on Thursday said the total amount of the incentives equals about 3.37% of Tesla's total investment in the state. The incentives are intended to create basic infrastructure and new roads to boost development in the area where the factory will be built west of the state capital Monterrey.

Meanwhile, Minister of State for Commerce and Industry Som Parkash on Wednesday informed the Lok Sabha that the government is not considering any proposal to provide duty concessions and exemption from local value addition for the import of electric vehicles into the country, a request raised by Elon Musk's Tesla, which is considering its entry into the Indian market. 

Responding to a question whether there is any proposal to exempt Tesla and other multinational car companies from local value addition of cost in heavy batteries, semiconductors and magnetic parts; and subsidy on the import duty on the import of EVs in India, Parkash said that a production-linked incentive scheme for automobile and auto component industry with a budgetary outlay of Rs 25,938 crore was announced by the government. 

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He said that the move was aimed at providing financial incentives to boost domestic manufacturing of advanced automotive technologies products including EVs and their components. "Presently, there is no proposal either to provide exemption from local value addition cost or to provide subsidy on import duty on import of EVs in India," Parkash said. 

(With Agencies Inputs)