Tesla has shelved plans to sell electric vehicles in India after failing to secure lower import duties, abandoned efforts to find showrooms, and reassigned some of its local teams, three people familiar with the matter said. Work. The decision also means Tesla has ended more than a year of deadlock in talks with representatives of the Indian government.
Tesla has sought to test local demand by selling electric vehicles imported from the U.S. and China in India at lower tariffs, but the Indian government is pressing Tesla to commit to local production before lowering the tariffs. It is reported that tariffs on imported cars in India can reach up to 100%.
Tesla had previously set a Feb. 1 deadline to determine whether the lobbying was fruitful, the day when India unveils its budget and announces tax reforms, people familiar with the matter said. The lack of concessions from Prime Minister Narendra Modi’s government this year has prompted Tesla to suspend plans to import cars into India, the people added.
For months, Tesla has been scouting for showrooms and service centers in New Delhi, Mumbai and Bengaluru, but that plan, too, has now been put on hold, two people familiar with the matter said.
Tesla has also assigned other jobs to some of its teams in India. Tesla India policy executive Manuj Khurana has held another “product”-related role in San Francisco since March, according to his LinkedIn profile. Strong demand for Tesla vehicles elsewhere, as well as a standoff between the Indian government and Tesla over import taxes, prompted Tesla to change its strategy, the people said.
Tesla hopes to gain an early advantage in the small but growing electric vehicle market in India. Currently, the Indian market is dominated by Tata Motors. The minimum selling price of Tesla vehicles is $40,000, which will put it in the Indian luxury car market. About 3 million cars are sold annually in India, with luxury cars only making up a tiny fraction.
Tesla did not respond to a request for comment, and an Indian government spokesman did not immediately respond to a request for comment.