Tesla’s India expansion has reportedly been put on hold. The company’s decision comes after more than a year of talks with the Indian government.
As negotiations on reducing vehicle import taxes stalled, Tesla reportedly decided to abandon plans to seek a showroom in the country. The company has also reassigned part of its national team to other projects.
The update concerned Reuters by three people who were allegedly aware of the case. The publication’s sources chose to remain anonymous because deliberations between Tesla and government officials were private.
Tesla has established its presence all over the world, but has not yet entered India. Since the country imposes substantial tariffs on imported vehicles – sometimes reaching 100% – Tesla has been pushing to reduce import taxes.
India, for its part, pushed Tesla to establish an assembly plant in the country to avoid high import taxes instead. Indian Transport Minister Nitin Gadkari also noted that Tesla should not import its Chinese-made vehicles into the country.
This would have been a disadvantage for Tesla, given that Gigafactory Shanghai is its main vehicle export hub. The China-based plant supplied Model 3 sedans and Model Y crossovers to territories in Europe and other parts of Asia.
Tesla reportedly set a Feb. 1 deadline to determine if its lobbying efforts were working, but when Prime Minister Narendra Modi’s government failed to offer a concession, the electric vehicle maker updated its plans.
Prior to its change of plans, Tesla had already spotted several real estate options for showrooms and service centers in India. Sites allegedly considered by Tesla included New Delhi, Mumbai and Bengaluru. Reports of supercharger stations being brought to India and sightings of Model Y test units on Indian roads were also reported last year.
Neither Tesla nor the Indian government has issued a statement on this.
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