Despite earlier enthusiasm, Tesla’s plans for expansion in India appear to have hit a snag, with reports suggesting that the company is “ghosting” local officials regarding the project’s status and potential investment in the country.
Despite Tesla’s persistent efforts to enter India’s automotive market, the company has thus far been unable to overcome the country’s protective barriers, including hefty import duties that make it challenging for foreign players to operate effectively in the local market.
Indian authorities requested Tesla to establish a domestic manufacturing facility, but the company preferred to test the market with imported vehicles before committing to a local production plant.
Twelve months ago, we revealed that India had finally reached a compromise on its automobile import duties, paving the way for Tesla and other electric vehicle (EV) manufacturers to enter the Indian market.
India has negotiated a landmark agreement with automakers, which involves a significant reduction in import duties on a limited range of electric vehicles provided that the manufacturer commits to establishing a dedicated electric vehicle production facility in the country over the next few years.
Tesla’s involvement in facilitating the deal appeared evident, given its close collaboration with the federal government; whispers suggested it might have seized the opportunity, had circumstances permitted.
Elon Musk has hinted that he will soon visit India, amidst plans to bring Tesla to the country’s market and establish a local manufacturing facility following the introduction of a proposed deal.
Despite initial plans, the CEO abruptly cancelled his trip to India at the last minute.
Bloomberg reports that Indian officials are skeptical about Tesla’s commitment to invest in the country, as Elon Musk’s team has ceased communication with their Indian counterparts.
Following Elon Musk’s delayed trip to India in late April, his team has yet to conduct further inquiries with Indian officials, according to unnamed sources who are not authorized to speak publicly about the matter? The Indian government has been informed by Tesla that the company does not intend to invest significant funds in the country in the near future, according to official statements.
Despite confirming a second consecutive quarter of declining year-over-year deliveries, Tesla’s prospects for securing funding in India are facing a notable chill.
Electrek’s Take
If reports are accurate, Tesla may have been deterred from expanding in India due to the complexity of entering a market with challenging regulatory conditions, rather than any inherent issues with its automotive business over the past few quarters.
Despite this observation, it is worth noting that soon after Elon cancelled his trip to India, he unexpectedly went to China instead.
China has become Tesla’s primary manufacturing hub, possibly playing a significant role in this decision.
