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Wednesday, May 25, 2022

Elon Musk’s Tesla and Indian govt are in “weird stalemate situation”: Report

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Tesla is working hard to bring its electric cars to Indian shores. The company has been publicly trying to build a case for its cars. Even company chief, Elon Musk has been asking the Indian govt to reduce the customs duty for electric cars. However, the Indian govt seems to be standing firm on its decision to incentivize local production. A new report has now surfaced which shows that the stalemate between both sides may extend longer. Also Read – Tesla owner faces risk of being jailed for an accident while driving on autopilot

A Reuters report has quoted some sources close to the govt who have been involved in the talks with Tesla. The sources have revealed that the govt is not very convinced with Tesla’s plan to start production in India. The govt, according to the source is demanding a firm commitment and a proper plan to invest in India. Also Read – Karnataka minister invites Elon Musk to set up Tesla plant in Bengaluru

The report quoted a person with direct knowledge about these discussions. The source said that the Indian govt and Tesla have reached a “weird stalemate situation”. The person also claimed that things are not really moving in the direction that Tesla wants. Also Read – Telangana minister invites Elon Musk, says will help ‘working through challenges’

Another source claimed that Tesla is also open to sourcing more auto components locally and then will gradually move to manufacture its products. However, this is not enough for the Indian govt as it needs a firm commitment before the company enters India.

A senior govt official has also been quoted in the report. The official revealed that a cut in the import duty of Tesla vehicles is highly unlikely. The official stated, “If they do not want to invest anything here, how is that model going to work.”

What happens to Indian buyers?

Assessing this new information, it is safe to assume that Tesla’s launch in India may get pushed further. Initially, the company wants to import the cars as completely built units (CBU). However, the high import duty can almost double the price of the car when compared to the costs in the United States.

Tesla believes that the majority of buyers won’t be willing to buy their cars at that price. The stalemate between both parties has been stretching for a long period. Tesla might soon have to take a decision to either enter India full throttle or play the waiting game.

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