Tesla Is Not Interested In India Anymore, Looks To Indonesia For Manufacturing

Tesla CEO Elon Musk has cited several challenges and Tesla has been vocal in wanting to get duties reduced.

Chief Executive Officer of Tesla Motors Elon Musk (Source: ABP)

New Delhi: The dream of officially buying a Tesla in India may have to wait for now since Elon Musk has other priorities right now and by that we are not saying Twitter! For a long time, Tesla has been asking the Indian Government to reduce import duties on electric cars so that they can first start by selling a few imported cars and then look at a manufacturing base. Things had started to flow in that direction with key staff recruited and showroom locations being sought after but now it is back to the drawing board with India launch plans on a halt, apparently. 

Tesla CEO Elon Musk has cited several challenges and Tesla has been vocal in wanting to get duties reduced. It is clear that Tesla first wanted to test our market with imported electric cars and then once established, take a look at making them locally.

There are many reasons why Tesla should come to India and not be fearful of committing to our market since Tesla has a huge brand value with many customers ordering their cars years back. While the luxury segment is still a small number compared to total cars sold, Tesla could have done decent numbers on the strength of its brand value alone along with the fact that there are several privately imported Tesla cars in India. However, there is another way of looking at this and Tesla might think right now might not be the best time to start selling imported cars in India or even start manufacturing. 

The volumes from imported cars would be too low with their cheapest car being still out of reach for most Indian car buyers and right now, Tesla has other bigger markets and other issues to see including its impending launch of its Cyber truck and Tesla roadster- both of which are delayed in its native US market.

So, while the Government wants Tesla to make and export cars without selling imported ones, Tesla seems to be looking at other options and immediately launching cars in India with the full duty is not one of them. Other reasons could be that Tesla is looking beyond India and is instead looking at Indonesia- a producer for nickel- a very important metal for production of batteries. Indonesia is also keen to push for more investment too with welcoming electric car makers. Some of the key Tesla staff hired for India might have also moved onto bigger or other roles.

This is in stark contrast to other carmakers which are keen to assemble or make EVs in India with luxury car-maker mercedes-Benz saying it will have its EQS luxury electric sedan being assembled in India while mass-market carmakers like Tata are tasting success with their EVs. Crucially, Suzuki is also building a plant to make EV batteries while also having its Gujarat plant rolling out its electric SUV by 2025.