Tesla is registered as a company in India. Its models have been regularly spied on our roads. And even the VAHAN database indicates that it has homologated certain models. But…
Tesla is coming to India. We have been hearing this for six years now. Yes, six years! Initially, when Tesla opened global bookings for the Model 3 in 2016, it was willing to take bookings from Indian customers.
Fast-forward six years, and Elon Musk has said this in a tweet – 'Still working through a lot of challenges with the government'. This was in response to a Twitter user who asked Musk about the launch of Tesla cars in India. This has pretty much been Tesla’s stance for more than a year now.
The Indian government is at the other end of this conversation. In fact, it has been encouraging carmakers to adopt the latest technologies as quickly as possible, including for EVs. However, when it comes to Tesla, the Indian government is in no mood to offer any up-front incentives.
Tesla feels that the taxes imposed by India on CBU imports are very high. Currently, they stand at 60% for cars with an overall value that is under $40,000 (roughly Rs 30 lakh), and 100% for cars that are valued above that. They want the Indian government to reduce this figure for EVs.
The government doesn’t want to do this, given that it would set a precedent and would be unfair to carmakers who have set up shop in India to develop electric vehicles. Such manufacturers include Tata Motors, Ola Electric, Ather Energy, and more. Therefore, the government wants Tesla to set up a manufacturing facility in India, and if that happens, the government would be happy to share the burden of setting it up.
Tesla doesn’t want to do this. It wants to gauge demand by bringing in its cars through the CBU route and then decide on setting up a factory. That’s because setting up a new factory (especially one that involves Tesla’s Giga Press) requires a lot of money, and Tesla doesn’t want to commit without any surety concerning the demand of its products.
So, what happens now? Well, in my opinion, Tesla will not feel the need to enter the Indian market, for it knows that until it brings in a model under Rs 20 lakh, there won't be enough sales to generate a profit. And Tesla doesn’t have anything in its line-up for under Rs 20 lakh – the lowest variant of the Model 3 costs Rs 30 lakh. And that’s before you add that 100% import tax on top of it.
And it seems that the Indian government, too, is not going to back down. There are enough carmakers bringing in EVs through the CBU route. In fact, Mercedes has just revealed that it will not only bring the EQS to India but also assemble it here.
Now, the ball is in Tesla’s court.Given the impasse, the only losers are going to be us, for we won’t get to experience Tesla cars. After a year of believing, I have reached the end of the rope. I can no longer in good conscience continue to believe that Tesla is coming. I will, only believe it, when it actually does.