Elon Musk’s Tesla Inc is yet to pursue investments under India’s new electric vehicle policy, which offers conditional tariff concessions, suggesting that discussions between the two sides may have stalled.
“We are still waiting for a response from Tesla on the EV policy. We are not really in touch with them,” a senior government official said, requesting anonymity.
Only a few months ago Musk’s scheduled visit to India in April was expected to include a meeting with Prime Minister Narendra Modi as well as speculations of an announcement of Tesla's entry into the country with a commitment to invest $2-3 billion in the South Asian Nation. However, Musk cancelled the visit, citing “very heavy" obligations at Tesla.
India is trying to position itself as a global EV manufacturing hub. By offering import duty concessions and mandating local investments, the government aims to lure major carmakers such as Tesla and help nurture local EV and automotive parts makers. The policy also aims to cut carbon emissions by promoting sustainable mobility.
The lack of inquiries from Tesla may not necessarily mean a loss of interest in investing in India, the official said, adding that “in any case, the CEO takes all the decisions in that organisation (Tesla). We will wait for a tweet. That is the only thing we can do.”
The EV policy
India’s EV policy, announced on March 15, provides import duty concessions to companies that commit to investing a minimum of $500 million, or a little over Rs 4,150 crore, and establish manufacturing facilities within India in three years with at least 25 percent of components sourced locally.
Companies that meet these requirements will be allowed to import 8,000 EVs a year at a lower duty of 15 percent on cars costing $35,000 and above. India levies a tax of 70 percent or 100 percent on imported cars, depending on their value.
The Centre is also expected to soon come out with draft guidelines on the revised policy for EV makers.
The revamped EV policy was expected to bolster the chances of Tesla's entry into India, given that the latter was said to be seeking tariff cuts to accelerate its plans to start manufacturing in the South Asian nation.
The Indian government and the US-based maker of electric cars have been in talks for a while about the latter's plans to reportedly set up a manufacturing unit in India.
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