Allow service, sale or Tesla won’t be made in India: Elon Musk

Founder and CEO of Tesla, the global leading electric vehicle maker, Elon Musk said in a Twitter post on Friday that the company will manufacture in India only if it is allowed to also sell and service its cars in the country.

“Tesla will not put a manufacturing plant in any location where we are not allowed first to sell & service cars,” Musk tweeted. He had tweeted in response to a question on Twitter asking if Tesla is setting up a manufacturing plant in India.

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High import duty a big hurdle for Tesla in India

Tesla has been eyeing its launch in India, a profitable market that it wants to tap. But since 2019, Tesla’s entry into Indian market has been on hold as India has put 60 per cent import duty on electric vehicles that are priced $40,000 or lower. Furthermore, on EVs over $40,000, the import duty is 100 per cent.

The company has reassigned its employees in India to work for the larger Asia Pacific market, as announced on May 5. The strict market in India may prompt Tesla to shift its focus to Indonesia where it may even set up its manufacturing plant.

The Indian government has introduced many incentives to encourage EV’s manufacturing and demand in the Indian market. This includes the Rs 10,000 crore FAME II (Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India) and the Rs 18,000 crore production-linked incentive (PLI) schemes. Expectation was that Tesla would participate in the PLI schemes, but it did not.

Union Road Transport and Highways Minister Nitin Gadkari had said last month that Tesla can manufacture its electric vehicles in India but it should not import cars from China.