Tesla’s expansion into India has reportedly been placed on hold. The company’s decision comes after over a year of talks with the Indian government.
With negotiations for lower vehicle import taxes reaching a stalemate, Tesla has reportedly decided to abandon its plans to search for a showroom in the country. The company also reassigned some of its domestic team to other projects.
The update was related to Reuters by three people who were reportedly familiar with the matter. The publication’s sources opted to remain anonymous because the deliberations between Tesla and government officials were private.
Tesla has established its presence across the globe, but it is yet to enter India. Since the country implements substantial tariffs on imported vehicles — sometimes reaching as high as 100% — Tesla has been lobbying for lower import taxes.
India, for its part, has been pushing Tesla to establish an assembly facility in the country as a way to avoid steep import taxes instead. India’s transport minister, Nitin Gadkari, also noted that Tesla should not import its China-made vehicles into the country.
This would have been an inconvenience for Tesla, considering that Gigafactory Shanghai is its primary vehicle export hub. The China-based facility has been supplying Model 3 sedans and Model Y crossovers to territories in Europe and other parts of Asia.
Tesla had reportedly set a February 1 deadline to determine if its lobbying efforts worked, but when Prime Minister Narendra Modi’s government did not offer a concession, the electric vehicle maker updated its plans.
Prior to its change of plans, Tesla had already scouted several real estate options for showrooms and service centers in India. Sites that were reportedly considered by Tesla included New Delhi, Mumbai, and Bengaluru. Reports of Supercharger stations being brought to India and sightings of Model Y test units on Indian roads, also emerged last year.
Neither Tesla nor the Indian government has issued a statement about the matter.
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