Tesla has put its plan to enter India on hold after failing to secure lower import taxes on its electric cars, news agency Reuters has learned. The decision to not enter the Indian market was reported just days after Tesla chief Elon Musk cited his 2007 trip to the country. Tesla abandoned its search for showroom space and reassigned some of its domestic team after more than a year of deadlocked talks with government, three people familiar with the matter told Reuters, according to a report published today.
On Monday, Elon Musk tweeted about his trip to Agra in Uttar Pradesh, which took place more than a decade ago. “It is amazing,” the Tesla CEO tweeted, referring to the Red Fort in Agra. “I visited in 2007 and also saw the Taj Mahal, which truly is a wonder of the world.”
Musk’s reference to India led many to wonder when Tesla cars would arrive in the country. Among those who posed this question to Musk was Paytm’s Vijay Shekhar Sharma.“It will be an incredible challenge for Tesla to build FSD (full self driving) for India,” Sharma tweeted. “That said, when are you coming here to deliver first Tesla here at The Taj?” he asked the Tesla and SpaceX billionaire.
It will be an incredible challenge for Tesla to build FSD for India.
We are known to be the most unruly road users
That said, when are you coming here to deliver first @Tesla here at The Taj ?
— Vijay Shekhar Sharma (@vijayshekhar) May 9, 2022
Sharma was hardly the first to wonder about Tesla’s arrival in India. Tesla enthusiasts have been looking forward to the electric carmaker’s foray into the Indian market since Musk, in 2020, tweeted that Tesla would come to the country by 2021.
"Next year for sure," Musk had said on Twitter in reply to a post which said: "India wants Tesla".
But 2021 came and went without any Tesla cars in India, the reason for which Musk himself explained on Twitter. “Still working through a lot of challenges with the government,” he tweeted in January 2022.
According to Reuters, the Indian government is pushing Tesla to commit to manufacturing locally before it will lower tariffs, which can run as high as 100% on imported vehicles. The government wants Musk to set up a factory in the country and sell locally.
Adar Poonawalla, CEO and owner of The Serum Institute of India, has also urged Musk to ‘make in India’.
"Hey Elon Musk, just in case you don't end up buying Twitter, do look at investing some of that capital in India for high-quality large-scale manufacturing of Tesla cars,” Poonawalla wrote in a tweet addressed to Musk earlier this month.
Hey @elonmusk just in case you don't end up buying @Twitter, do look at investing some of that capital in INDIA for high-quality large-scale manufacturing of @Tesla cars. I assure you this will be the best investment you'll ever make.— Adar Poonawalla (@adarpoonawalla) May 8, 2022
Tesla had set itself a deadline of February 1, the day the government unveils its budget and announces tax changes, to see if its lobbying brought a result, the sources with knowledge of the company's plan told Reuters.When Prime Minister Narendra Modi's government did not offer a concession, Tesla put on hold the plans to import cars into India, added the sources, who sought anonymity because the deliberations were private.