Amidst Teslas' share slump, a relook at its India foray plans

Elon Musk-led Tesla is in the news for the wrong reasons for missing its delivery targets coupled with the recent Cybertruck explosion. While it navigates through the current challenges, Republic Business does a deep-dive analysis of the company, which has not yet forayed into the Indian market. The company's journey into the Indian market has been characterized by a series of strategic evaluations, negotiations, and cautious advancements. 
Here's an overview of Tesla's plans in India so far:

Evaluating Feasibility 

Tesla's interest in entering the Indian market dates back several years before the onset of Covid.  Elon Musk had initial plans to import vehicles as a Completely Built Unit and assess market potential.

Import Duties and Market Opportunity

High import duties on electric vehicles posed significant challenges, leading Tesla to reconsider its approach and eventually putting its plans on hold. Elon Musk, CEO of Tesla and SpaceX, asserted that the tax rates on imported vehicles are prohibitively expensive and also urged the government to cut tariffs. 

Government hardening its stance

Even before Tesla could make an an official announcement of its India foray, the government made it amply clear that while American EV maker is welcome to set up shop here, but will not be encouraged to import cars from China to India. 

Elon Musk's meetings with PM Modi

Elon Musk has engaged with Indian Prime Minister Narendra Modi on multiple occasions, focusing on potential investments and collaborations in India. In June 2023, during Prime Minister Modi's visit to the United States, he met with Elon Musk in New York City. Musk expressed admiration for Modi, stating, "I am a fan of Modi," and indicated a strong interest in investing in India "as soon as humanly possible." 

Office Establishment in Pune

In August 2023, Tesla leased office space in Pune, signaling a renewed commitment to establishing a presence in India. However, there were no announcement made by Tesla in this regard.
EV Policy tailormade for Tesla Inc. 

EV Policy tailormade for India

The government came up with a new electric vehicle (EV) policy-Scheme to Promote Manufacturing of Electric Passenger Cars (SMEC)- which was formulated to entice Tesla for setting up a facility in India. According to this policy, which was announced in March 2024, companies that invest at least $500 million and build a domestic manufacturing facility can import electric cars at a 15 per cent customs duty for five years.

Elon Musk's planned Visit and subsequent Cancellation

In April 2024 Musk announced plans to visit India to further discussions on establishing a manufacturing facility here. However, this visit was abruptly canceled due to some other obligations towards Tesla shareholders. 

Renewed Interest in the Indian Market

Despite keeping its earlier plans in cold storage, recent reports indicate that Tesla has renewed its interest in entering the Indian market. As per an unconfirmed media report, Tesla restarted its search for showroom spaces in New Delhi, collaborating with India's property developer DLF. This move suggests a reevaluation of Tesla's strategy towards establishing a presence in India. 

Present Scenario

Until January 2025, no official announcements have been made regarding Tesla's investment plans in India. However, industry analysts claim that the renewed search for showroom spaces indicates Tesla interested in setting up company-owned showrooms in the first phase.