Tesla’s India plans stall as communication comes to a stop

Tesla’s long-awaited and highly anticipated entry into the Indian market appears to be stalling, as recent reports indicate a communications between CEO Elon Musk, his executives and Indian officials have come to a stop.

Tesla’s potential entry into the India, one of the biggest car markets in the world, has been talked about for years. The biggest barrier preventing it from happening was the country’s high import taxes. Tesla has tried to get the country to budge on the high import taxes, but discussions between Tesla and India came to a stalemate as the automaker was not willing to invest in the country until concessions on the import taxes were made, and India wasn’t willing to budge on the import taxes until Tesla committed to a large investment.

After the stalemate, the Indian government had taken proactive steps earlier this year to attract Tesla by finally agreeing to lower import taxes on electric vehicles (EVs) for foreign automakers willing to invest a significant sum and begin local production within three years.

Hope that an announcement was coming peaked when Musk announced a planned visit to the country, where he was expected to meet with Prime Minister Narendra Modi, after previously saying he planned a significan investment in India “as soon as humanly possible.”

However, the visit was abruptly canceled in late April.

According to a report by Bloomberg, citing sources familiar with the matter, Tesla has ceased communications with Indian officials. Those sources revealed that the Indian government now believes Tesla does not plan to commit new investments in the near future.

While current prospects for a Tesla investment in India appear bleak, the door is not entirely closed. Indian officials have indicated that Tesla would still be welcome to benefit from the revised import tax policy should the company decide to re-engage.

Tesla’s investment in India isn’t the only project, or potential project, that has stalled. Giga Mexico was announced in early 2023, and construction was initially expected to start within weeks and the facility would be up and running in less than a year. However, Tesla appears to be in no hurry, and has scrapped plans to build the next-generation vehicle at Giga Mexico, shifting those plans to Giga Texas instead.

Musk has said that Tesla is in no rush to build Giga Mexico, explaining that there are other factors at play, like high interest rates, that have delayed the start of the project.

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