Tesla executives are said to have stopped contacting Indian authorities after Elon Musk postponed a visit to India in April this year
Indian authorities believe that Tesla is facing capital issues and does not plan on pledging fresh investment into India in the near future
In April, Musk announced the postponement of his trip to India where he was scheduled to announce Tesla’s plans to enter the country
Electric auto major Tesla appears to have shelved its plans to set up a manufacturing plant in India.
Tesla executives have stopped contacting Indian authorities after the company’s CEO Elon Musk postponed a visit to India in April this year, Bloomberg reported, citing sources.
As per the report, Indian authorities do not expect the EV major’s proposed investments in the country to materialise.
Musk’s team has not made any further enquiries with Indian officials, as per the report. Local authorities were also given to understand Tesla was facing capital issues and the company does not plan on pledging fresh investment into India in the near future.
Meanwhile, the Centre is now reportedly banking on domestic legacy auto players such as Tata Motors and Mahindra & Mahindra to boost EV production in the country. The report added that Tesla would still be “welcome” to avail the new import tax policy if the EV maker reignites plans to set up a unit in the country.
The development comes two months after Musk, in April, announced the postponement of his trip to India during which he was scheduled to meet Prime Minister Narendra Modi and announce Tesla’s plans to enter the country.
However, just a few days later, Musk ended up visiting China, a move that added a layer of mystery to the development.
Tesla’s waning interest in India comes after a year of hectic talks between the EV major and Indian officials. Prior to the cancellation of his visit, reports had surfaced that the automaker was looking to pledge $2 Bn worth of investments to set up a factory in India to produce low-cost Tesla cars under INR 20 Lakh.
In the run up to Musk’s visit, the Centre unveiled a new EV policy that offered reduced import taxes to foreign carmakers that commit to investing at least $500 Mn (INR 4,150 Cr) and establishing a manufacturing plant in India within three years.
But, the sops appear to have failed to woo Tesla. Curiously, it was reported in April that the Musk-led EV company planned to use its existing factories to build new and affordable vehicles, rather than invest in building new factories in India.
The latest development comes at a time when India is witnessing a jump in EV adoption, largely on the back of the sale of electric two-wheelers and three-wheelers. Meanwhile, EV car sales in the country jumped 21% year-on-year (YoY) to 40,663 units in the first half of calendar year 2024.
Despite the growth, a vast majority of the Indian EV market still remains untapped. As per a report, EV cars accounted for a mere 1.3% of the total car sales in the country last year. As a result, there is a large scope for growth and has seen legacy players like Tata and Mahindra launch a series of new EV-focussed offerings.
At the heart of all this is the growing Indian EV space, which is projected to be a $150 Bn market opportunity by 2032.
