Tesla's plan to conquer the Indian market appears to have hit a roadblock as Elon Musk abruptly postponed his visit to the country in April and headed to China instead.
Executives at the electric carmaker have cut off contact with Indian officials, leading them to conclude that Musk has no plans to invest in the country in the near future. Bloomberg reported.
Tesla is said to have eyed India, the world's third-largest auto market, as its next growth destination.
The company shelved the plan after the Indian government reportedly insisted that it produce cars locally, as it does in China. The automaker had preferred to import vehicles initially to gauge demand.
Mr. Musk had said Tesla would be in India “as soon as humanly possible” after meeting Indian Prime Minister Narendra Modi during his state visit to the US last year. “He really cares about India because he’s been pushing us to make significant investments in India, which is something we plan to do. We’re just trying to get the timing right,” said Mr. Musk, who called himself a “fan of Mr. Modi.”
“I am confident that Tesla will be in India and that it will be as soon as possible.”
The automaker planned to invest $2 billion to $3 billion and build a new factory in India, Reuters reported in April. Musk was expected to announce the deal after a meeting with Modi in April.
But he canceled the visit, saying: “Very heavy Tesla commitments require the India visit to be postponed, but I am very much looking forward to visiting later this year.”
Just a week later, the erratic billionaire made an unscheduled visit to China.
The visit reportedly helped Tesla clear regulatory hurdles to launching self-driving software in the country, a crucial market for the company. Mr. Musk met with Chinese Premier Li Qiang, and Tesla's Model 3 and Y vehicles soon after met the country's data security requirements.
Now that Tesla has cooled interest in India, officials said Bloomberg that they were looking to domestic automakers to boost electric vehicle production. But Tesla would still be welcome to use a new import tax policy if Musk decides to re-enter the fray, they said.
Tesla's apparent absence from India comes as the Chinese government is looking to buy its Model Y, state-run news agency Paper.cn reported.
The Model Y, an all-electric compact crossover SUV, has been included in a list of electric and hybrid vehicles that local governments can purchase for use as service vehicles.
India is likely still on Musk's radar, as he congratulated Modi after he was sworn in as prime minister for the third time last month.
“Congratulations Narendra Modi on your victory in the world’s largest democratic elections! I look forward to my companies doing exciting work in India,” he wrote on X.
Mr Modi replied that “India's youth, our demography, predictable policies and stable democratic politics will continue to create the business climate for all our partners”.
The electric vehicle market in India is small but growing, and is currently dominated by local automaker Tata.
Modi's government aims to have 30 percent of new cars be electric by 2030, up from about 2 percent now.
In recent years, Musk has opposed India’s high import taxes on electric vehicles and lobbied for change. In March, the Indian government introduced a new policy that would reduce import taxes from as high as 100 percent to 15 percent on certain models, provided the automaker invests at least $500 million and establishes a manufacturing plant in the country.
