Tesla reportedly puts its India entry on hold after it failed to secure a deal for lower tariffs.
Tesla’s plan to enter the Indian market was reportedly put on hold after failing to secure lower import taxes, Reuters reported citing three people familiar with the matter. The automaker also abandoned its search for a showroom space and reassigned its domestic team.
Earlier this year, Elon Musk said that Tesla is “Still working through a lot of challenges with the government” in response to a tweet on when Tesla will launch in India.
The decision caps more than a year of deadlocked talks with government representatives as Tesla sought to first test demand by selling electric vehicles (EVs) imported from production hubs in the U.S. and China, at lower tariffs.
However, India wanted Tesla to build a manufacturing plant first in India before it will lower tariffs. The Indian government charges a 60% import tax on electric vehicles that are priced at $40,000 or less, and a 100% import tax on vehicles priced at more than $40,000.
Tesla had set itself a deadline of Feb. 1 the day India unveils its budget and announces tax changes, to see if its lobbying brought a result, anonymous sources told Reuters.
Sources also said that Tesla has been scouting for months for locations on showrooms and service centers in key Indian cities such as New Delhi, Mumbai and Bengaluru, which the plan is now on hold.
Tesla has shown interest on entering the Indian market, however, they wanted to test the market first by importing China manufactured cars, in which the Indian government is opposed to as Indian Minister for Road Transport and Highways Nitin Gadkari said that “Making in China and selling here is not a good proposition”
