Why are CARS SO EXPENSIVE in India? | A Case Study | tbh

Описание: In recent years, the cost of cars in India has been steadily rising, creating significant challenges for the middle class. The Tesla Model Y, which was recently launched in India is almost double the price here in India when compared to the USA.

Taxation plays a crucial role in determining car prices in India. The government levies multiple taxes, including Goods and Services Tax (GST), road tax, registration charges, and additional state-specific levies. These taxes can add substantial amounts to the base price of a vehicle. For instance, the GST rates vary between 5% and 28% depending on the type and value of the car, significantly inflating the final price.
Manufacturing costs have also risen due to several factors.

The implementation of stricter safety and emission norms requires manufacturers to invest in advanced technologies and more sophisticated manufacturing processes. Additionally, raw material costs, including steel, aluminum, and electronic components, have increased globally. The transition towards electric and hybrid vehicles has further pushed up development and production expenses.

Import duties on crucial components and the need for localization add another layer of complexity to pricing. While the government encourages domestic manufacturing through initiatives like Make in India, the automotive supply chain still faces challenges that contribute to higher costs.

The result is a challenging landscape for middle-class consumers, who find themselves stretching their budgets to own a vehicle that has become increasingly necessary for daily life in India's rapidly developing urban and suburban environments.