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May 17, 2024

Tesla Remains Silent on India EV Plans Despite New Policy

US electric vehicle (EV) manufacturer Tesla has yet to reveal its plans for entering the Indian market under the new EV policy, according to a government official. Tesla CEO Elon Musk, who had been scheduled to visit India on April 21-22, postponed his trip, citing pressing commitments related to Tesla. His visit was anticipated to include a meeting with Prime Minister Narendra Modi.

Despite the new policy, which offers import duty concessions to attract global EV manufacturers, Tesla has remained uncommunicative about its intentions. “They (Tesla) are just silent.. the (EV) policy was always meant for everybody,” the official stated when asked if Tesla had outlined its plans. An email inquiry to Tesla went unanswered.

Musk had previously confirmed his India visit in a post on X (formerly Twitter), expressing eagerness to meet with Prime Minister Modi. Last June, during Modi’s visit to the US, Musk had discussed his plans to visit India in 2024 and expressed confidence about Tesla’s entry into the Indian market soon.

Expectations were high that Musk’s visit would include significant announcements about Tesla establishing a manufacturing unit in India. Such an investment could amount to billions of dollars and pave the way for Tesla to begin selling its electric cars in India promptly. Additionally, Musk is interested in the Indian market for his satellite internet venture, Starlink, which is awaiting regulatory approvals.

Musk has previously advocated for reduced import duties in India to facilitate the sale of Tesla cars. The new EV policy, announced by the government a few weeks before Musk’s scheduled visit, aims to attract major global players like Tesla by offering import duty concessions. Specifically, the policy allows companies that set up manufacturing units in India to import a limited number of cars at a reduced duty rate of 15% on vehicles costing $35,000 and above for five years. Currently, cars imported as completely built units (CBUs) face customs duties ranging from 70% to 100%, depending on engine size and cost, insurance, and freight (CIF) value.

Last month, representatives from Tesla’s advisory group, The Asia Group (TAG), attended the first stakeholders’ meeting on the new EV policy. Other attendees included representatives from Vietnam’s VinFast and major Indian manufacturers like Maruti Suzuki, Hyundai, Tata, Mahindra, Kia, Skoda Auto Volkswagen India, Renault, Mercedes-Benz, BMW, and Audi. This consultation aimed to gather input for the policy guidelines.

Under the new policy, companies setting up manufacturing facilities for EV passenger cars in India can benefit from lower import duties, promoting India as a destination for EV manufacturing and attracting investment from reputed global manufacturers. Last year, Tesla had approached the Indian government seeking duty reductions to import its vehicles into the country.

Despite the attractive new policy, Tesla’s lack of communication leaves its India plans in limbo. The Indian market remains eager to see if and when Tesla will take concrete steps towards establishing its presence, potentially revolutionizing the country’s EV landscape.

Jhumpa Lahiri

Jhumpa Lahiri

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