Tesla’s India entry plans almost cancelled after top executive quits

The intense spurt of lobbying efforts by Tesla to enter the Indian market seems to have ended now. A key executive appointed by Tesla to speed up the lobbying has resigned. The move comes after the largest electric car maker in the world had put the plans to sell EVs in India on hold.

Tesla’s India entry plans almost cancelled after top executive quits

As per a report by Reuters, Manuj Khurana, a policy and business development executive at Tesla in India was appointed in March 2021. He played a key role in forming the strategy to enter the Indian car market.  Khurana lobbied the Indian government for more than a year to reduce import taxes on electric cars. Tesla wanted to reduce the import taxes on CBUs to 40% from 100%.

Tesla wanted the tax cut to bring in fully-imported models from production hubs like China. While the Indian government remained adamant and asked Tesla to commit to manufacturing cars locally before any kind of concessions. Tesla wanted to test the Indian market but the manufacturer said with 110% tax, the cars will be too expensive for the market.

With the interests deadlocked for a long time, Tesla had put its plan to sell the cars in India on hold. Some appointees of Tesla in India were shifted to Middle East markets while many others resigned. Tesla even started looking for showroom space before putting the plan on hold. Tesla’s plan to enter India is officially dead said a source to Reuters.

Make cars in India for tax rebate

Even though Tesla wanted to bring cars to India, the massive tax regime on imported vehicles has stopped Tesla to enter the Indian market. The Tesla officials sought a rebate on fully-imported electric vehicles, which is currently more than 110%. However, the Indian government said that Tesla needs to manufacture cars in India in order to get any kind of rebate.

Tesla even opened an office in India and hired a management team. But it does not look like the brand will bring any new cars to the Indian market anytime soon.

A few years ago Tesla started accepting bookings for the Model 3 in India and business jargon like Vijay Shekhar Sharma was one of the first few ones to pay a $1,000 booking amount and book the vehicle. However, Tesla decided to defer the launch in India later. With the new move, Tesla is likely to accept fresh bookings from the Indian market.

The first product is likely to have a price tag of around Rs 60 lakh. Since the import taxes are very high in India and Tesla will launch the car as CBU,  it will command a high price tag. Tesla has set up a Gigafactory in China and the products are likely to be imported from there. If Tesla ever builds a manufacturing facility in India, the price of the vehicles may come down to Rs 30 lakh but that might take years to happen.