Elon Musk, the CEO of Tesla, appears to be stepping back from potential investments in India. According to a report by Bloomberg, citing officials in the Indian government, Tesla’s executives have stopped communicating with Indian officials, raising questions about the electric vehicle (EV) giant’s plans for the country. In late April, Musk had scheduled a visit to India, including a meeting with Prime Minister Narendra Modi. However, this visit was postponed, and since then, there have been no further discussions between Tesla and Indian authorities. The stalled talks are linked to Tesla’s current financial challenges, with no immediate plans for new investments in India.
This cooled interest from Tesla comes at a time when the company is facing numerous hurdles. Tesla has reported its second consecutive quarterly decline in global deliveries, and competition in the Chinese market is intensifying. Additionally, Musk announced significant staff reductions in April, and the highly anticipated Cybertruck has been slow to enter the market. Construction of a new plant in Mexico has also been delayed, adding to the company’s woes.
Indian officials, including those from the Ministry of Heavy Industries, Ministry of Finance, and Ministry of Commerce and Industry, have not commented on the situation. Tesla has also remained silent on the matter. In April, Musk canceled his planned visit to India, which was scheduled to follow the country’s announcement of reduced import taxes on EVs for foreign carmakers that commit to investing at least 41.5 billion rupees (about $497 million) and starting local EV production within three years.
With Tesla’s interest fading, India is now focusing on domestic automakers like Tata Motors and Mahindra & Mahindra to drive the growth of its EV sector. Government sources, however, say that the Indian government remains optimistic, stating that if Musk decides to revisit his plans, Tesla would still be welcome to take advantage of the new import tax policy.
India’s EV market is still developing, with electric cars accounting for only 1.3 per cent of total car sales last year, according to BloombergNEF. Many potential buyers are discouraged by the high upfront costs of electric cars and the limited availability of charging stations. The situation highlights the broader challenges Tesla is facing globally. While the company has been a leader in the EV market, it is now navigating a complex landscape of competition, production delays, and financial pressures.
For India, this means relying more on homegrown companies to push forward in the EV race. While India remains open to Tesla’s future involvement, the immediate prospects of seeing Tesla cars produced in the country seem slim. The focus now shifts to strengthening the local EV market and overcoming the barriers that have slowed its growth.
