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Global EV brand Tesla may have suspended its plans to enter the Indian market. This may be due to its inability to get the Indian government’s buy-in on a downward tariff review. The company is reported to have commenced reassigning local employees.Tesla

This could be a blow to the expected quantum of jobs that could be created in the subcontinent with Tesla’s presence. India remains the largest market in the world that lacks Tesla’s presence. Strong import tariffs hand been a major impediment to Tesla’s entry into the Indian market. There were though some indications that it could have entered the market in 2022. This followed the incorporation of an Indian entity in Bengaluru as the brand’s Indian arm.

India has a rich incentive regimen for local manufacturers of electric vehicles and this includes high import tariffs for EVs. The policy has made it difficult for foreign EV powerhouses in China and the US, have been unable to penetrate the market. Tesla had planned to build an EV production facility in India but intended to see how its vehicles fared first in the market. Currently, up to 7 Tesla EVs have been tested and approved in India. The Indian government, through its transport minister, has noted that it wants Tesla to build cars inside India, and not to rely on imports from China. The Service Center and Supercharger stations are yet to be established in the country.

Some of Tesla’s key employees in India are now being reassigned to overseas jobs. The main snag in Tesla’s inability to build an EV production facility in China is its insistence on a favorable import regime. The government will not give preferential treatment, and so it continues to pursue development elsewhere.

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