Tesla is not expected to invest into India soon as Musk ghosts officials
Why isn't Tesla investing in India soon?
Tesla's potential investment in India is facing challenges due to the country's protectionist efforts, including high import duties on vehicles. Although a compromise was reached to reduce import duties for a limited number of electric vehicles, Tesla has reportedly stopped communicating with Indian officials, and there are concerns about the company's capital issues. Tesla's recent decline in quarterly deliveries and increased competition in China may also be affecting its decision to invest in India.
What issues did Tesla face with India's import duties?
Tesla faced high import duties on vehicles being imported into India, which the automaker found unfavorable for entering the market. The Indian government initially wanted Tesla to build a factory in the country, but Tesla preferred to first establish a market through imported vehicles. A compromise was later reached, involving reduced import duties for a limited number of electric vehicles, provided Tesla made a significant investment and commitment to build an EV factory in India.
What did the Indian government require from Tesla?
The Indian government required Tesla to invest $500 million in local auto components and establish a manufacturing facility in the country to be eligible for import tax cuts6. The company would also need to achieve a localization level of 25% by the 3rd year and 50% by the 5th year of operations.