Elon Musk giving India the cold shoulder? Tesla CEO may not be investing in India after all

Elon Musk, the CEO of Tesla, appears to be stepping back from potential investments in India.

According to a report by Bloomberg, which quotes officials in the Indian government, Tesla’s executives have ceased communication with Indian officials, leading to doubts about the electric vehicle (EV) giant’s plans for the country.

In late April, Musk had planned to visit India, including a meeting with Prime Minister Narendra Modi. However, this visit was ‘postponed’, and since then, there have been no further discussions between Tesla and Indian authorities. The halt in talks is linked to Tesla’s current financial challenges, with no immediate plans for new investments in India.

This cooling interest from Tesla comes at a time when the company is facing several hurdles. Tesla has reported its second consecutive quarterly drop in global deliveries, and competition in the Chinese market is intensifying.

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Additionally, Musk announced significant staff reductions in April, and the much-anticipated Cybertruck has been slow to enter the market. Construction of a new plant in Mexico has also been delayed, adding to the company’s woes.

Indian officials, including those from the Ministry of Heavy Industries, Ministry of Finance, and Ministry of Commerce and Industry, have not commented on the situation. Tesla, too, has remained silent on the matter.

In April, Musk cancelled his planned visit to India, which was set to follow the country’s announcement of reduced import taxes on EVs for foreign carmakers that commit to investing at least 41.5 billion rupees (about $497 million) and starting local EV production within three years.

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With Tesla’s interest waning, India is now focusing on domestic automakers like Tata Motors and Mahindra & Mahindra to drive the growth of its EV sector.

The sources in the government, however, say that the Indian government remains optimistic, stating that if Musk decides to revisit his plans, Tesla would still be welcome to take advantage of the new import tax policy.

India’s EV market is still developing, with electric cars making up just 1.3 per cent of total car sales last year, according to BloombergNEF. Many potential buyers are deterred by the high upfront costs of electric cars and the limited availability of charging stations.

The situation showcases the broader challenges Tesla is facing globally. While the company has been a leader in the EV market, it is now navigating a complex landscape of competition, production delays, and financial pressures. For India, this means relying more on homegrown companies to push forward in the EV race.

While India remains open to Tesla’s future involvement, the immediate prospects of seeing Tesla cars produced in the country seem slim. The focus now shifts to strengthening the local EV market and overcoming the barriers that have slowed its growth.