Tesla Puts All India Plans On Hold As Modi Govt Refuses Any Tariff Relaxations

Tesla's plans for India have been put on hold after a deadlock on tariffs. Essentially, we are back to square one and now it's even more unclear when Tesla will officially sell its electric cars in India.

According to Reuters, Tesla has abandoned the search for showrooms while also reassigning some of its domestic teams after Tesla was unable to secure lower import taxes.

BBC

What went wrong for Tesla in India?

Tesla wanted to test the demand for electric vehicles in India first by selling electric vehicles made in the United States and China at lower tariffs.

Enter Indian government. India's Modi-led government doesn't want a test run. Instead, they want Tesla to set up a manufacturing hub in India before any tariff relaxations are extended to Tesla. It's important to mind here that often, tariffs on imported vehicles in India can touch 100%!

Reuters

It appears that this pullout was long-awaited. Tesla had apparently set a February 1 deadline to assess whether its lobbying efforts worked.

Also read: Not India, Elon Musk May Choose Indonesia As Tesla's Production Hub In Asia

In the absence of any relaxations, Tesla has effectively put all plans to import cars to India on hold. Tesla was also looking at showroom spaces in New Delhi, Mumbai, and Bengaluru. But now, even those plans have been put on hold, two sources told Reuters.

Reuters

In January, Tesla's founder Elon Musk said that he was "still working through a lot of challenges with the government" when talking about potential sales in India.

Still working through a lot of challenges with the government

¡ª Elon Musk (@elonmusk) January 12, 2022

The government wants manufacturers to build in India as part of its "Make in India" campaign. In April, India's transport minister Nitin Gadkari had said that it would not be a "good proposition" for Tesla to sell China-made cars in India.

Also read: Watch: Tesla Rams Into $3.5 Million Jet After Owner Uses 'Smart Summon' Feature

This is not the first Elon Musk-related effort to be put on hold today. Musk's $44 billion takeover of Twitter has also been paused until further notice.

What do you think about Tesla putting its India plans on hold? Let us know in the comments below. For more in the world of technology and science, keep reading Indiatimes.com.

References

Shah, A. (2022, May 13). Tesla puts India entry plan on hold after deadlock on tariffs-sources. Reuters.