Tesla India Top Executive Quits After EV Maker Puts Entry Plan On Hold: Report

Weeks after automaker Tesla put its India plans on hold, the electric vehicle (EV) maker’s India policy and business development executive Manuj Khurana has resigned, news agency Reuters reported.

“Tesla’s plans to launch in India right now are as good as dead”, the report quoted a source as saying.

This comes weeks after Tesla boss Elon Musk tweeted that the company will not manufacture in any country where it is not allowed to sell and service cars first. Musk was responding to a question about the EV maker’s India debut.

Khurana was hired in March last year and was tasked with preparing an entry plan for the EV maker in the country. He was the company’s first employee in the country and lobbied the union government for slashing import taxes and manufacturing mandates, the report said.

Tussle Over Tax Cut 

Tesla and the Indian government had disagreements over a slew of issues including high import taxes and local manufacturing. 

The EV maker had urged the Centre to slash import duties before it debuts in the Indian market. Under the current regime, 100% import duty is imposed on fully imported cars with a Cost, Insurance, and Freight (CIF) value of more than $40,000 and 60% duty is imposed on cars whose CIF value is less than $40,000.

The government, however, refused to entertain the request, citing compliance of other foreign EV players with the current tax regime. Officials were also apprehensive of the damage a tax waiver could deal to the local EV industry players. 

The two sides also sparred over the Centre’s insistence that Tesla set up a manufacturing plant in the country. The Centre had previously conveyed to Tesla executives that the EV giant should manufacture in India, rather than import or assemble parts in the country.

While Tesla planned to launch its product in India by February, it shelved its plans following the disagreements with the government. 

India’s four-wheeler EV space is led by home-grown players such as Mahindra and Tata Motors. The space is also populated by foreign players such as Hyundai, MG Motor, Mercedes Benz, among others. 

According to a report, the overall EV penetration in the country hovers around 0.8%, with four-wheelers forming a mere 4% of the total sales.

According to the Federation of Automobile Dealers Association (FADA), retail sales of EV four-wheelers stood at 17,802 in FY22, a three-fold increase from 4,984 in FY21.