Tesla’s entry plan to India is on hold after the company and Indian officials reached a deadlock over tariffs.
As per the reporting by Reuters, the deadlock is over import tariffs on Tesla’s vehicles.
The crux of the issue is that Indian import tariffs are extreme and are up to 100 per cent of the cost of the vehicle.
Tesla wants to import a set number of vehicles to see the interest in the brand. As local sales numbers would allow them some confidence in the new market.
Once sales are solid, they would then look to set up some local production.
While the Indian government did not offer a concession on the import duties. Instead, the Indian government is pushing Tesla to commit to local manufacturing before considering a review of tarrifs.
In response to the deadlock, Tesla has abandoned a search for showroom space and reassigned some of its domestic team to other projects.
Company sources confirmed that Tesla’s real estate search in New Delhi, Mumbai and Bengaluru is now on hold.
Former India policy executive Manuj Khurana has also taken on a “product” role in San Francisco, as per his LinkedIn profile.
Tesla nor the Indian government provided a comment on the situation.