India’s Proposed EV Tax Hike Threatens Tesla and Luxury Carmakers

India's electric vehicle ambitions face a potential setback as a government panel recommends steep tax increases on premium EVs. The proposal WOULD raise GST rates from 5% to 28% for vehicles priced above $46,000, with a new 40% category for luxury models. This move directly targets imported vehicles from Tesla, BMW, Mercedes-Benz, and BYD.

Domestic manufacturers like Tata Motors and Mahindra appear insulated from the worst impacts, as their product lines focus on more affordable segments. The timing raises questions about India's EV strategy, coming during a period of 93% year-on-year growth in EV adoption from April to July.

Industry analysts warn the tax hikes could significantly slow market growth, contrasting sharply with global trends where subsidies and incentives dominate EV policy. Tesla's long-awaited India entry faces new hurdles, particularly for its Model Y which would fall squarely within the affected price range.