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India Not Expecting Tesla Investment as Elon Musk's Engagement Fades
India doesn’t foresee Tesla Inc. moving forward with an investment in the country soon, following a halt in communication from Elon Musk’s electric carmaker, insiders reveal. Musk’s team has not made any additional inquiries with New Delhi officials after the billionaire postponed a planned visit to India late in April, according to sources who requested anonymity due to lack of authorization to speak publicly. The Indian government understands Tesla faces financial constraints and isn’t poised to commit new investments in the near term.
This lack of interest coincides with Tesla reporting its second consecutive quarterly drop in global deliveries, coupled with increased competition in China. April saw Musk announce significant staff reductions and delays in the launch of Tesla’s newest model, the Cybertruck, as well as setbacks in constructing a new plant in Mexico.
Despite efforts from India’s Ministry of Heavy Industries, which oversees the automotive sector, and its finance and commerce ministries, to engage with Tesla, no response has been received. Similarly, Tesla has not commented on the situation. Musk had initially planned a visit to India, including a meeting with Prime Minister Narendra Modi, but canceled due to pressing company matters. This visit was scheduled shortly after India reduced import taxes on EVs for foreign carmakers willing to invest at least 41.5 billion rupees (around $497 million) and commence local EV production within three years.
In the absence of Tesla’s engagement, the Indian government aims to boost EV production domestically, relying on companies like Tata Motors Ltd. and Mahindra & Mahindra Ltd. If Musk chooses to reconnect, Tesla is still welcome to benefit from the new import tax policy. Currently, India's electric vehicle market is nascent, with battery-powered cars comprising only 1.3% of total vehicles last year, according to BloombergNEF. Consumers remain hesitant due to the high initial costs and limited availability of charging stations.
