The potential acceptance of Tesla’s proposal by the Indian government could be risky for domestic auto manufacturers like the Tatas and Mahindras as they have made large investments in developing electric vehicles (EVs) following government policies, a top official at Kia India said.

“There have been many rumours regarding Tesla...so far what I believe is the Indian government has a very clear position on Tesla. The government is clearly refusing Tesla's proposals because if they accept, it would be very risky to the current original equipment manufacturers (OEMs) in India, especially the local manufacturers like Tata and Mahindra,” Tae-Jin Park, Managing Director and Chief Executive Officer, Kia India told businessline.

In response to a query on possible sops for EVs in Parliament on December 13, Minister of State for Commerce and Industry Som Parkash said, “Presently, there is no proposal either to provide an exemption from local value addition cost or to provide subsidy on import duty on import of electric vehicles in India.”

On Tesla’s aggressive pricing and competition which could potentially compete with Kia’s EV6, Hyundai’s Ioniq 5, and the likes, he said that while Tesla’s price policy has shaken all OEMs in India, it is the Chinese companies that are much more aggressive in competing for price.

Park added that to compete with such pricing strategies, Kia is prepared to launch products like EV9 next year and mass market EVs in 2025.

“We are already thinking about setting up our strategy...I don’t think we are worrying too much about those kinds of things happening. If it is happening (subsidies or competitive pricing), we will just do what we are prepared to do,” he said.

Park said that Kia is not only preparing for EVs, but also other alternative fuel options in its portfolio including hybrids and CNG, and is even preparing to replace diesel vehicles, depending on the demand.

“It depends on the priority...when you consider on demand or environmental issues, we must think of replacement of the diesel vehicles. So, everybody is talking about something will happen by 2027 but nobody knows anyway. But, we must prepare...at Kia, we are very carefully preparing to introduce some hybrids and CNG vehicles,” he said.

He said that Kia continues to produce diesel vehicles as there is still high demand for them in some parts of the country. He added that the decision to discontinue them will depend on government policies or market demand.

For instance, the company has reintroduced manual transmission across all variants with Diesel powertrain in its latest Sonet, which will be launched in January.

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