Elon Musk, who has been trying to launch Tesla in India for the past couple of years, says he is still haunted by the "key challenges" at the government's end that have grounded his electric cars from running on domestic roads. Despite the government luring him with various schemes and promises and repeated "come and manufacture/assemble your cars here" calls from the top ministers, Musk is complaining on Twitter that he is "still working through a lot of challenges with the government".
Musk was replying to a Twitter user, who asked: "Yo @elonmusk any further update as to when Tesla's will launch in India? They're pretty awesome and deserve to be in every corner of the world!"
Tesla wants to begin selling imported cars in India this year but says taxes in the country are among the highest in the world. With a $39,990 global price tag, Tesla Model 3 may remain as an affordable model in the US but with import duties, it would become unaffordable in the Indian market with an expected price tag of around Rs 60 lakh.
There's a way out
Currently, India levies 100 percent tax on imported cars of price more than $40,000 (Rs 30 lakh) inclusive of insurance and shipping expenses, and cars less than $40,000 are subject to 60 percent import tax. The government may consider lowering import duty along with offering other sops to Tesla but for that, the EV major would have to invest in setting up a manufacturing facility in the country.
Instead, Tesla might be considering importing its cars from China, where it has a huge Giga factory and full local sourcing, instead of the US. This might be a problem seeing India is trying to reduce imports, especially from China. This could be another reason why the Indian government isn't relieving import duties on Tesla cars.
The same old nagging
In 2015, Prime Minister Narendra Modi visited the Tesla headquarters at Palo Alto, California and met Musk who gave Modi a tour of the company's electric car plant. Since then, Musk has been tweeting about key challenges he faces in India.
He has always blamed the Indian government's policies for giving up on his India dreams and also criticised the FDI norms for the delay in the electric car maker's entry into the Indian market.
"Would love to be in India. Some challenging government regulations, unfortunately," Musk had tweeted back then.
In this hesitation, Tesla might be left behind by other manufacturers who are already betting big on EVs. In the current scenario, the Indian government is encouraging the Indian automotive industry through a performance-linked incentive (PLI) scheme and Tata Motors, Mahindra & Mahindra, Ola Electric, Hyundai Motor and MG Motor have already started supporting domestic manufacturing.
Even Mercedes-Benz is planning to launch India assembled flagship electric sedan, 'EQS' this year. Tesla is clearly missing out on getting an early advantage.
(Additional agency inputs included)