Why is Tesla still not in India? Elon Musk says ‘challenges with the government’

The wait for Tesla to enter Indian market appears to have no end in sight even as the luxury electric vehicle market in the country has seen brands like Mercedes-Benz, Audi, BMW and Jaguar Land Rover make power moves. While Tesla has a commanding lead in the world of EVs, its absence from the Indian market is likely to continue for some time with CEO Elon Musk recently tweeting about the task at hand.

Musk, the world's wealthiest person and a active Twitter user with millions of followers on the micro-blogging site, attempted to give some clarity on why Tesla has still not made its India debut. "Still working through a lot of challenges with the government," he tweeted in a reply post.

Still working through a lot of challenges with the government

— Elon Musk (@elonmusk) January 12, 2022

Musk had previously pointed to high import duty on vehicles brought from overseas markets as an obstacle, even asking the government to lower taxes imposed on such units. The Indian government wants Tesla to boost local procurement and share a detailed manufacturing plan.

The Indian automotive market, to a large extent, is still price sensitive and at a time when Tesla wants to play the volumes' game, even its most affordable product - Model 3 - may not find mass appeal if taxed at existing rates.

Then there is the perplexing question of where Tesla plans to bring in units to India from. Last year, Union Minister Nitin Gadkari said he had asked Tesla to not sell China-made models in India. The plant in Shanghai, Tesla's first outside of the US, is a major hub for not just catering to local Chinese demand but for several global markets as well.

Tesla, meanwhile, shattered delivery records yet again with nearly a million units sent out in 2021 - 936,000 to be precise. Half of these were in China while the US and some European markets remain crucial to Tesla's fortunes.

(With inputs from Bloomberg)