India’s dream of a Tesla factory seems to be on hold. After executives stopped communicating with Indian officials, the country now expects no new investment from the electric carmaker in the near future.
This comes amidst a string of challenges for Tesla. The company recently reported declining deliveries, rising competition in China, and internal struggles including staff cuts and production delays.
Indian government officials from relevant ministries, including Heavy Industries, Finance, and Commerce & Industry, haven’t responded to requests for comment. The company remains silent as well.
The lack of communication follows Elon Musk’s cancelled visit to India in April. Originally planned to include a meeting with Prime Minister Modi, the trip was scrapped due to pressing company issues.
The cancellation came shortly after India reduced import taxes for foreign electric vehicle manufacturers. This policy incentivizes investment and local production with a minimum investment of Rs 4,150 crore ($497 million) within three years.
With Tesla seemingly out of the picture, India is turning its focus to domestic players. Tata Motors and Mahindra & Mahindra are now seen as the government’s hope for boosting domestic EV production. However, the door isn’t entirely shut for Tesla. Officials say the company can still benefit from the new import tax policy if they choose to re-engage.
India’s electric vehicle market is young, with battery-powered cars making up a mere 1.3% of total sales in 2023. High upfront costs and limited charging infrastructure continue to deter many potential buyers. This turn of events highlights the complex landscape surrounding electric vehicle adoption in India. While the government offers incentives, challenges like affordability and infrastructure remain. Only time will tell if domestic manufacturers can fill the gap left by Tesla’s absence.
Reference- Economic Times, Moneycontrol.com, Mercom India, InsideEVs. Business Standard