Report: Tesla’s plan to come to India cancelled?

Tesla, a leading electric car manufacturer, looks to have abandoned its intentions to establish a factory in India. 

Following the cancellation of Elon Musk's planned trip to India in April of this year, Bloomberg reported, citing sources, that Tesla executives had ceased communicating with Indian officials. 

According to the article, Indian officials do not anticipate that the EV giant will really make the projected investments in the nation.

The report states that Musk's team has not gotten in touch with Indian officials again. Additionally, local officials were informed that Tesla was having financial difficulties and that it had no immediate plans to make new investments in India.

To increase EV manufacturing in the nation, the Centre is allegedly now depending on homegrown legacy automakers like Tata Motors and Mahindra & Mahindra. In the event that the EV manufacturer revives ambitions to open a facility in the nation, the article stated that Tesla would still be "welcome" to take advantage of the new import tax regime. 

The announcement was made by Musk in April, two months before he was supposed to meet with Prime Minister Narendra Modi and reveal Tesla's intentions to join the Indian market.

But a few days later, Musk made the trip to China, which threw further ambiguity into the proceedings.

After tense negotiations between the EV giant and Indian regulators for a whole year, Tesla has shown less interest in the country. Before his trip was postponed, rumours circulated that the carmaker wanted to commit $2 billion to build an assembly plant in India that would construct Tesla vehicles that cost less than INR 20 lakh. 

Prior to Musk's arrival, the Centre revealed a new EV policy that provided lower import tariffs to international automakers that agreed to build a manufacturing facility in India within three years and invest at least $500 million (INR 4,150 Cr).

It was revealed in April that the Musk-led EV business intended to create new, reasonably priced cars using its current facilities instead of investing in the construction of new ones in India.

The most recent development coincides with an increase in EV adoption in India, mostly due to sales of electric two- and three-wheelers. In the meantime, sales of electric vehicles (EVs) in the nation increased 21% YoY to 40,663 units in the first half of 2024.

The great bulk of the Indian EV industry is yet unexplored, despite the rise. According to a survey, just 1.3% of all automobiles sold in the nation last year were electric vehicles. Because of this, there is a lot of room for expansion, and established companies like Tata and Mahindra have started to introduce a number of new EV-focused products.

The expanding Indian EV industry, which is anticipated to reach a $150 billion market size by 2032, is at the centre of it all.