New Delhi: Tesla Three people familiar with the matter said it had shelved plans to sell electric cars in India, abandoned the search for a showroom location and reassigned some of its domestic team.
The decision follows more than a year of standoff with government representatives as Tesla sought earlier tests by selling imported electric vehicles (EVs) from production centers in the US and China at lower tariffs.
But the government is committing Tesla to manufacturing locally before lowering tariffs, which could run up to 100%, on imported vehicles. Sources familiar with the company’s plans said Tesla had set a February 1 deadline to see if its lobbying yields any results. Tesla halted plans to import cars into India when the government did not offer a concession, said the sources, who asked for anonymity because the discussions were private.
For months, Tesla had been exploring real estate options to open showrooms and service centers in major cities of New Delhi, Mumbai and Bengaluru, but that plan too is now on hold, two sources said. Tesla did not respond to an email seeking comment.
A government spokesman did not immediately respond to a request for comment.
As recently as January, Chief Executive Officer Elon Musk had said that Tesla “still faces a lot of challenges with the government” regarding sales in India.
But strong demand for Tesla’s vehicles elsewhere and the impasse over import taxes prompted a change in strategy, the sources said. Modi has tried to woo manufacturers with a “Make in India” campaign, but his transport minister, Nitin Gadkarisaid in April that it would not be a “good proposition” for Tesla to import cars from China into India.
But New Delhi won in January, when German luxury carmaker Mercedes-Benz said it would start assembling one of its electric cars in India. Tesla was looking to make early gains in India’s small but growing market for electric vehicles, now dominated by the domestic automaker Tata Motors, Tesla’s minimum price tag of $40,000 will put it in the luxury segment of the Indian market, where sales are a tiny fraction of the annual vehicle sales of around 3 million. Reuters