Tesla Inc has reportedly halted its plans to sell electric cars in India as discussions with government representatives have worked out yet, and they havent been able to lower the import taxes.
Three sources close to the development have reported that Tesla has also stopped looking for a showroom space, and has also reassigned some of its domestic team.
Earlier, Musk had tweeted, “Tesla isn’t in India yet due to ‘Challenges with the government.’”
The talks between Tesla and the government of India have been going on for more than a year. Initially, Tesla asked to test the demand in the country by selling electric vehicles that will be prodcued in the United States and China, at a lower rate.
Government of India Pushing For Make-In-India?
However, the government has been pushing the company to make a commitment of manufacturing locally before lowering the tariffs. These tariffs can go as high as 100% on imported vehicles.
We had previously reported that Tesla will have to commit to sourcing at least $500 million of auto components from India in order to get an import tax cut on its vehicles.
It could start at a lower base but the company will have to agree to increase Indian parts purchased by around 10% to 15% a year until a satisfactory level is reached.
The administration has formally told Tesla to ramp up domestic sourcing but hasn’t given it a procurement target yet.
Tesla said in August that it sourced around $100 million in parts from India. The government is interested in Tesla manufacturing in the country but is worried that it is using the market here and taking advantage of it.
Tesla Employees Assigned Other Roles
As per reports, Tesla employees have been assigned other roles – Nishant Prasad, thrusted with the responsibility of Tesla’s supercharger network at Tesla India has updated his LinkedIn profile to Charging Operations Lead-APAC.
Whereas, Manoj Khurana has updated his LinkedIn profile to show that he has been assigned the additional “product” role in San Francisco since March.
Gadkari on Tesla’s EV Production in India
At a private event in Delhi held last month, he Road Transport and Highways Minister Nitin Gadkari addressed a question on remarks of the US auto giant Tesla’s concerns on India demanding high duties.
The minister answered by inviting Tesla’s CEO Elon Musk to manufacture e-vehicles in India, given the conducive environment for automobile manufacturing in the country.
However, Gadkari also said that in case Musk wants Tesla’s production and manufacturing to happen in China and then sell the finished products in India, then that may not be a very good proposition.