Tesla Puts India Entry Plan On Hold After Deadlock On Tariffs, Says Report

Tesla has also abandoned its search for showroom space and reassigned some of its domestic team after failing to secure lower import taxes in India

The government has been pushing Tesla to commit to manufacturing locally before it will lower tariffs, which can run as high as 100 per cent on imported vehicles. Image: Getty

Source : Getty

New Delhi: It was quite an eventful day for Elon Musk. After putting the Twitter deal on hold temporarily, the Tesla CEO has shelved its plans to sell electric cars in India,

Quoting sources, news agency Reuters reported on Friday said Tesla has put entry plans to India on hold.

According to the report, the US electric automaker has also abandoned its search for showroom space and reassigned some of its domestic team after failing to secure lower import taxes in India.

The decision of putting India plans on hold came after a year of stalemate, as talks with the government representatives yield no results.

Tesla had forwarded a proposal to the Centre seeking to first test demand by selling electric vehicles (EVs) imported from production hubs in the United States and China at lower tariffs. However, the government has been pushing Tesla to commit to manufacturing locally before it will lower tariffs, which can run as high as 100 per cent on imported vehicles.

Tesla had set itself a deadline of February 1, the day after the Union Budget was announced by the government, to see if its lobbying yielded a result, the sources told Reuters.

Tesla, which was expecting concession from the central government, put on hold the plans to import cars.

Earlier, the company had scouted for real estate options to open showrooms and service centres in metro cities across the country. However, that plan is also now on hold, the sources mentioned.

Neither Tesla, nor the government officials respond to an email seeking comment by Reuters.

Recently, Union transport minister, Nitin Gadkari, said that it would not be a "good proposition" for Tesla to import cars from China to India.

The US e-vehicle maker had looked to gain an early advantage in India's small but growing market, but now it is dominated by domestic automaker, Tata Motors.