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Tesla’s India Entrance Strategy Would Be Put On Hold

May 16, 2022 / By Zunair Tahir / Automotive News

According to three people familiar with the issue, Tesla has put plans to sell electric cars in India on hold, abandoned a search for showroom space, and moved members of its domestic staff after failing to negotiate reduced import taxes.

Tesla planned to gauge demand by offering lower taxes on electric cars (EVs) imported from production hubs in the United States and China, which resulted in a year of deadlock negotiations with government officials.

The Indian government, on the other hand, is urging Tesla to commit to local manufacturing before lowering import levies, which can be as high as 100%.

According to people familiar with Tesla’s plan, the business set a deadline of February 1 to see if their lobbying paid off, the day India announces its budget and reveals tax revisions.

According to the persons who asked anonymity because the conversations were private, Tesla put its plans to import cars into India on hold when Prime Minister Narendra Modi’s government refused to compromise.

According to two sources, Tesla had been exploring for real estate options in New Delhi, Mumbai, and Bengaluru for months, but that plan has also been put on hold.

Tesla did not reply to an email request for comment. The Indian government did not respond to a request for comment right away. Tesla’s modest team in India has been handed additional responsibilities for other markets.

According to his LinkedIn page, Manuj Khurana, the company’s India policy head, has been working in a new “product” function in San Francisco since March.

In January, Tesla CEO Elon Musk claimed the business was still “working through a lot of challenges with the government” in terms of sales in India. Increased demand for Tesla automobiles in other countries, as well as a dispute over import levies, prompted the adjustment in strategy. Modi has attempted to woo businesses with a “Make in India” campaign, but his transport minister, Nitin Gadkari, claimed in April that Tesla importing vehicles from China would be a “bad suggestion.”

New Delhi, on the other hand, won a triumph in January when Mercedes-Benz announced that it will begin manufacturing one of its electric cars in India.

Tesla had intended to gain a competitive advantage in India’s small but growing electric car industry, which is now dominated by Tata Motors.

Tesla’s starting price of $40,000 (about Rs. 31 lakh) would put it in the premium segment of the Indian market, where sales account just a small proportion of the country’s almost 3 million annual automobile sales.


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