Tesla has been planning to launch its cars in India for a quite while now. However, the company’s plan has hit a roadblock. Additionally, the company has also stopped looking for showroom space and reassigned a few from its domestic team.
Tesla had been in talks with the Government of India for lower import tariffs. The discussions had been ongoing for more than a year. However, the company failed to secure a tax break. Hence, for now, Tesla had to cancel its plan to enter the Indian market.
What’s Tesla’s Roadblock?
Tesla’s initial plan was to gauge the market demand. For this, the company planned to import the cars from production hubs in China and the United States at a lower tariff. However, the Indian government continued pushing Tesla for a commitment.
The government wants Tesla to commit to manufacturing its cars locally before it will lower tariffs. For reference, taxes on imported vehicles can be as high as 100 per cent. The company set itself a deadline of 1st February, the day the country unveiled its budget and announced tax changes. However, with no mention of a concession for the brand, Tesla put on hold the plans to import cars to India.
Tesla wanted to get an early mover advantage in the electric vehicle space in India. However, the roadblocks the company faced with the government caused delays. Ultimately, the company put a hold on its launch plans.
Internationally, pricing for Teslas starts at around USD 40,000. Even the starting price of Tesla puts it in the luxury segment of the Indian market. Coupled with the import taxes, it would push the cost to the upper end of the luxury market. Hence, it does not make sense for Tesla to launch its models in India for the time being.
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