Tesla has put aside its plans to enter the Indian market amidst an impasse on tariff negotiations with the government. The electric vehicles giant stopped looking for showroom space and relocated some of its employees, a recent Reuters report says.
The arrival of this situation comes after more than a year of impasse talks with the government representatives seeking to first test the market with vehicles imported from other production facilities in the US and China, at lower tariffs.
Amidst the government’s “Make in India” campaign, transport minister, Nitin Gadkari, said in April it would not be a “good proposition” for Tesla to import cars from China to India.
The Indian government is looking for a commitment to local manufacturing before it will lower tariffs, which can be as high as 100% on imported vehicles.
In January, German premium automaker Mercedes-Benz said it would assemble one of its electric models in India.
Also at the same time, the leading EV maker is already trying to meet the strong demand for its vehicles in multiple markets, so the impasse likely triggered the change in strategy, as per the report.
Tesla hoped to gain a major portion of the growing market, which is captured by Tata Motors.
The majority of the Indian passenger automotive market has a price tag below INR 2 million (~ USD 25811).
Moreover, Tata Motors’ Tigor EV starting at INR 1,249,000 (~ USD 16,119 ) and Nexon EV starting at INR 1,774,000 (~ USD 22,894) extremely competitive price tags lie within the price range of a considerable amount of new consumers. Whereas, Tesla’s minimum USD 40,000 (~ INR 3,099,460) price tag would put it out of most Indian buyers’ price range who are looking to buy a new car.