tesla: Tesla puts India entry plan on hold – Times of India

New Delhi: Tesla has made plans to sell electric cars in India, abandoned the search for showrooms and relocated some of its domestic team after failing to secure lower import taxes, said three people familiar with the matter.
The decision limits more than a year of locked talks with government representatives, when Tesla first tried to test demand by selling electric vehicles (EVs) imported from production hubs in the US and China, at lower tariffs.
But the government is pressuring Tesla to commit to manufacturing locally before it will cut tariffs, which can be as high as 100% on imported vehicles. Tesla had set a deadline of February 1 to see if its lobbying activities yielded results, said sources with knowledge of the company’s plan. When the government did not offer a concession, Tesla put up plans to import cars to India, added the sources, who sought anonymity because the deliberations were private.
For months, Tesla has been looking for real estate alternatives to open showrooms and service centers in the key cities of New Delhi, Mumbai and Bengaluru, but that plan is also now on ice, said two of the sources. Tesla did not respond to a request for comment.
A government spokesman did not immediately respond to a request for comment.
As recently as January, CEO Elon Musk had said that Tesla “is still working through many challenges with the government” when it comes to sales in India.
But the strong demand for Tesla’s vehicles elsewhere and the conflict over import taxes led to a change in strategy, the sources said. Modi has tried to attract manufacturers with a “Make in India” campaign, but his Minister of Transport, Nitin Gadkarisaid in April that it would not be a “good proposal” for Tesla to import cars from China to India.
But New Delhi had won in January, when the German luxury car manufacturer Mercedes-Benz said they would start assembling one of their electric cars in India. Tesla had tried to gain an early advantage in India’s small but growing market for electric vehicles, now dominated by domestic carmakers Tata Motors. Tesla’s price tag of at least $ 40,000 would place it in the luxury segment of the Indian market, where sales make up only a small fraction of the annual sales of vehicles of around three million. reuters

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