Elon Musk-led Tesla sees India as a ‘very hot market’, but rues the 100% tariffs on automobiles, which it says make customers anxious. The US auto giant continues to evaluate the timing of its entry into this promising market, according to Tesla’s chief financial officer Vaibhav Taneja’s statement.
Tesla has long sought to establish a presence in India, the world’s third-largest automotive market. However, the exceptionally high tariffs, which CEO Elon Musk says are amongst the world’s highest, remain a significant obstacle.
Recent developments show Tesla securing showroom locations in India and advertising numerous job positions, indicating progress towards market entry. Import records reveal that Tesla brought a Model Y vehicle from Germany to India in March, valued at $46,000 for shipping purposes.
“The same car which we’re sending is 100% more expensive than what it is. So that creates a lot of anxiety. People feel OK, they’re paying too much for the car … That’s why we’ve been very careful trying to figure out when is the right time (to enter India),” Vaibhav Taneja said during an earnings call according to a Reuters report.
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“India is a very hot market,” he added.
Tesla reported disappointing first quarter financial results on Tuesday, showing a 71% decline in net profit.
Tesla has approached Indian authorities to reduce import duties on vehicles, whilst officials from Prime Minister Narendra Modi’s government are negotiating with U.S. President Donald Trump’s administration to reduce the 100% duties through a bilateral trade agreement.
The United States has requested complete removal of vehicle tariffs, however New Delhi remains hesitant to eliminate taxes entirely, though it is considering additional reductions.
Local automotive manufacturers like Tata Motors and Mahindra and Mahindra have strongly resisted any tariff reductions that would make imported vehicles more affordable.
Following discussions with Modi regarding technological and innovative partnerships, Musk announced his intention to visit India this year.
Last year, Tesla nearly established a presence in India, with Musk planning a visit to announce investments ranging from $2 billion-$3 billion, including an EV manufacturing facility. However, he withdrew from the trip at the final moment.
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