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Tesla has reportedly abandoned plans to set up a manufacturing plant in India. After CEO Elon Musk postponed his April visit to India Tesla executives ceased communications with Indian authorities.
Sources indicate Tesla faces capital issues and does not plan further investments in India soon. Consequently Indian authorities do not expect the proposed investments to materialize.
The Indian government is now relying on domestic automakers like Tata Motors and Mahindra & Mahindra to boost EV production.
Despite the setback Tesla remains welcome to benefit from India’s new import tax policy if it decides to invest later.
This policy offers reduced taxes to foreign carmakers investing at least $ 500 million and setting up a plant within three years.
Musk's cancellation of his India trip followed by a visit to China added mystery to the situation.
Previously Tesla had been expected to invest $2 billion in a factory for low cost cars in India.
Meanwhile India’s EV market is growing especially in two and three wheelers with EV car sales rising 21% year on year in early 2024.
The Indian EV market projected to be worth $150 billion by 2032 still has vast growth potential with legacy players launching new EV models.
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