Upcoming General Elections To Slow Down Talks For Tesla’s India Entry

The ongoing talks between the Indian government and Tesla for the entry of the Elon Musk-led electric vehicle (EV) company in the country are reportedly likely to slow down due to the upcoming general elections.

While the Election Commission of India (ECI) is yet to release the schedule for the Lok Sabha polls, the elections are expected to take place in April-May this year.

The halt in talks is temporary and the discussions will resume post the culmination of the elections, a senior government official told MoneyControl. 

“The talks on Tesla’s entry into India are likely to happen after the elections, as electorally it may create controversies,” the official said.

The development comes fresh nearly a month after it was reported that Tesla is open to committing nearly $30 Bn in direct and indirect investments in India over the course of the next five years.

With the investment, the company is looking to set up a local factory in the country. The company is confident of its ability to set up the factory within three years of entry and roll out its first indigenously assembled car by 2026. 

The company will be making an investment of $2 Bn in India for setting up the factory. The capital infusion depends on the government’s decision to approve concessional duty of 15% on its imported vehicles during the first two years.

However, the government earlier denied any plans to offer tax relaxation to a specific company. 

With adoption of EVs on the rise in the country, many global automakers, besides Tesla, are eyeing the Indian market. 

From Taiwanese tech giant Acer licensing its brand to mobility startup eBikeGo in India to VinFast signing an MoU with the Tamil Nadu government to set up a plant in the state, a host of companies have made a beeline for India. 

In addition, giants such as Audi, BMW and Mercedes-Benz have also launched a slew of EV offerings to tap into the burgeoning Indian EV ecosystem and cater to the growing demand. Not just this, two-wheeler EV startup Ola Electric filed its IPO papers with SEBI and is looking at a potential 2024 public listing.

At the heart of this India push is the country’s burgeoning EV market, which is projected to balloon to a size of $110 Bn by 2029, as per a report.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.