New Delhi: Tesla CEO Elon Musk has postponed a planned trip to India where he was scheduled to meet Prime Minister Narendra Modi on Monday and announce plans to enter the South Asian market, three people familiar with the matter told Reuters on Saturday. It is unclear why Musk postponed the trip as Tesla and PMO did not immediately respond to requests for comment.
After Reuters reported his India trip plans on April 10, the CEO posted on X: "Looking forward to meeting with Prime Minister Narendra Modi in India!"
However, the world's richest man confirmed that he will not be able to visit India as earlier scheduled. "Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year," Musk posted on his X social media platform.
In New Delhi, Musk was expected to announce an investment of $2 billion to $3 billion, mainly to build a factory in India, after the government announced a policy lowering high tariffs on imported cars if companies invest locally. India last month cut electric vehicle import taxes to 15% from as much as 100% for automakers that invest at least $500 million and set up a factory.
Tesla's plans for India
Days ahead of tech billionaire Elon Musk's India visit, an advisor representing Tesla, the electric car manufacturer, participated in a stakeholders' meeting focused on India's newly formulated Electric Vehicles policy on Thursday, sources said. "It was a stakeholder consultation meeting seeking inputs for the guidelines to be framed for the new EV manufacturing policy. Tesla was represented by its advisor, The Asia Group (TAG). Vietnam's electric vehicle manufacturer VinFast was also present in the meeting," a senior official said.
Tesla is grappling with slower growth for electric vehicles in both its main markets of the United States and China. Reuters reported this month that Tesla has cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth. Demand for electric cars in India - the world's third-largest auto market - is expected to rapidly climb. EVs made up just 2% of India's total car sales in 2023, but the government has said it wants 30% of all new car sales to be electric from 2030.
The US electric carmaker is looking at potential showroom locations in New Delhi and Mumbai ahead of plans to begin sales in India later this year, two people familiar with the discussions said. It wants to begin with a showroom of 3,000 to 5,000 square feet (280-465 square metres) as well as a service hub in each city, said one of the people familiar with the plans. The automaker has begun production of right-hand drive cars at its plant in Germany for export to India, separate sources have said.
Under India's new policy, effective immediately, companies that meet the requirements will be allowed to import up to 8,000 EVs costing $35,000 or more a year at a lower tax rate of 15 per cent. India currently levies a tax of 70 per cent or 100 per cent on imported EVs depending on their value, and its new policy was a big win for Tesla, which was facing pushback from domestic carmakers.
Tesla EVs in India will be 'natural progression': Musk
Dropping a major hint about his plans in India earlier this month at an X Spaces session, Musk said, "India is now the most populous country in the world, based on population. India should have electric cars just like every other country has electric cars. It's a natural progression to provide Tesla electric vehicles in India."
Elon Musk in June last year said that he was planning to visit India in 2024, adding that he was confident that the electric carmaker will be in India and will do so "as soon as humanly possible". PM Modi had also extended an invitation to the billionaire to visit India. "I would like to thank PM Modi for his support and hopefully, we will be able to announce something in the future," Musk said at this time.
In November, Union Commerce Minister Piyush Goyal visited Tesla's manufacturing facility in California's Fremont and said that the US electric car maker is on its way to double its components imports from India. Goyal said he was proud to see the growing importance of auto component suppliers from India in the Tesla EV supply chain.
(with inputs from Reuters)
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