Taming the Indian Tiger: Tesla’s Tryst with the Subcontinent

After years of speculation, and a series of business flirtations, it seems that Tesla’s arrival in India may finally be on the horizon. Recent developments indicate a new phase in the ongoing dance between the electric vehicle giant and the world’s second most populous country. Yet, numerous challenges and unanswered questions remain.

In a recent meeting in New York, Tesla CEO Elon Musk had a “very good” conversation with Indian Prime Minister Narendra Modi, fuelling expectations that the California-based EV maker is renewing its push to enter the Indian market. Musk expressed his confidence about Tesla’s entry into India, suggesting it would happen “as soon as humanly possible.” He also revealed plans to visit India next year.

Despite this optimistic outlook, the history of Tesla’s attempts to enter India is marked by roadblocks and difficulties. A key obstacle has been India’s high import tariffs for foreign electric vehicles, a policy designed to encourage local production. For years, Tesla has been lobbying the Indian government to reduce these import duties, but to no avail. This has resulted in the automaker shelving plans for an India launch, reassigning local employees, and putting on hold plans for service centers and Supercharger stations.

Tesla’s cheapest car, which costs around $45,000, would attract a 100% import duty in India, making it prohibitively expensive and negating the brand’s key selling point of affordability. In response to these steep tariffs, Musk previously expressed on Twitter that India’s import duties are the “highest in the world by far of any large country”.

Despite these challenges, the Indian government has been persistent in its push for Tesla to start operations in the country. As part of the ‘Make in India’ initiative, Prime Minister Modi’s government suggested that Tesla could manufacture its vehicles in India, offering subsidies and discounts, but only if the cars are made domestically. The government has been firm in its stance, even as Tesla has shown interest in first testing the waters by importing vehicles before setting up a factory.

Nevertheless, recent signals suggest that Tesla might be revisiting its Indian ambitions. Musk indicated that the company would probably pick a location for a new factory by the end of this year. These comments came on the heels of a Tesla team visiting Delhi for discussions with officials. Union Minister Rajeev Chandrasekhar mentioned that Tesla is “very seriously looking at India as a production and innovation base” and assured the automaker of the government’s support.

The stakes are high for Tesla. The company’s goal to sell 20 million electric vehicles annually from 2030 onwards necessitates a major expansion of its production facilities. With competitors like Mercedes, BMW, and Volkswagen steadily catching up in the EV race, Tesla needs to act swiftly. The company currently operates six manufacturing plants, with plans for another Gigafactory in Mexico.

India’s rapidly growing electric vehicle sector, spurred by the government’s clean energy push, offers a tantalizing opportunity for Tesla. The market is currently dominated by Tata Motors, which is rolling out affordable electric vehicles. For Tesla, the challenge lies in competitively pricing its cars while providing its state-of-the-art experience in a price-sensitive market like India.

While the path to India is fraught with challenges, Tesla’s entry could revolutionize the country’s EV landscape. As the world watches, the dance between Tesla and India continues, brimming with potential and promise.




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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.


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