Talks between Tesla and the Indian government have hit crucial hurdles, which could determine if the automaker invests in a production facility in the country.
Tesla’s need for a growing number of production facilities has only increased in recent months as it looks to grow its product offerings and the number of markets in which it operates. This has resulted in a worldwide search for a new facility location, which has taken Tesla CEO Elon Musk everywhere, from France to Indonesia. Now, as company representatives have reached India, talks with government officials have revealed some potential hurdles that could prevent the automaker from placing its next facility in the South Asian country.
According to a new report from Reuters, Tesla’s talks with Indian officials have focused on government policy regarding incentives for manufacturers and consumers in the country. Noting the complexity of the talks, a Tesla insider told Reuters that the company is still “testing the waters and trying to understand the local policies.”
As noted in the report, Tesla’s apparent plan to enter the Indian market through the placement of a production facility is a significant departure from its previous market entrance attempt, in which the automaker aimed to import vehicles to India. These plans were halted in 2019 as the company was unable to negotiate lower import tariffs, which can reach as high as 100% of a vehicle’s value. Surprisingly, at the time, top leaders, including Indian PM Narendra Modi and Tesla CEO Elon Musk, were involved in the talks, unlike the current discussions.
Reuters reports that top supply chain executive Karn Budhiraj (seen below) heads the Tesla delegation, while the Indian government’s Electronics and Information Technology Ministry has been the primary point of contact. Specifically, Tesla has been in contact with the Indian Deputy State Minister of Skill Development, Entrepreneurship, Electronics, and Information Technology, Rajeev Chandrasekhar.
Neither Tesla nor the Indian government has addressed the talks publically, and Tesla has not revealed any specifications of the potential facility in India.
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