India Warns Tesla It Will Not Accept EVs Made In China

Elon Musk met Narendra Modi to present Fremont six years ago 6 photos
Photo: Narendra Modi/YouTube
Tesla ShanghaiTesla ShanghaiTesla ShanghaiTesla ShanghaiElon Musk met Narendra Modi to present Fremont six years ago
Tesla has been discussing selling its cars in India for quite some time. Although Elon Musk states he is against tax incentives, it is precisely Tesla’s request for special treatment in that regard that is preventing sales to Indian customers. The latest development in that discussion came from India’s transportation minister, who said Tesla should not import cars from China to sell in the Indian market.
According to Reuters, Nitin Gadkari said in a government press conference that Tesla was welcome to sell its cars in India and to make them there both for the local market and for exports. However, importing them from China would not be “a good proposition.”

That entire prelude makes it clear that Gadkari and the Indian government are not concerned with safety – such as Chinese army facilities forbidding Tesla vehicles from entering its premises – or any ideological war. What India does not want is to buy cars that it could be building itself.

India’s prime minister has already disclosed he wants to promote a “Made in India” strategy to attract companies and create jobs in the country. In that sense, Narendra Modi is doing what Joe Biden planned for the U.S. with the Invest in America Act: all countries want to manufacture stuff instead of only buying them from other ones. In February 2021, Karnataka’s chief minister, Bookanakere Siddalingappa Yediyurappa, even said Tesla would have a factory in his state, more specifically in Tumakuru. Tesla never confirmed that.

For Modi, that is particularly important after Ford decided to close its factories in India. Attracting new companies is crucial to increasing the country’s per capita income. Ironically, that is precisely why Tesla is worried about opening a new factory there.

India has a massive population. Unfortunately, it is also known as a poor country. According to the World Bank, it had a GDP per capita of $1,927.70 in 2020. In the same year, Americans had a GDP per capita of $63,593.44. The best-selling vehicles in India are cheap cars, not electric vehicles with premium prices like the ones Tesla sells. That said, an Indian factory would be dedicated to exports.

From what Reuters reports, that makes perfect sense for the Indian government, but Tesla apparently disagrees. It may prefer to expand its Chinese factory, which is close to essential battery suppliers, instead of having to build everything it needs in India to sell most of these cars elsewhere. The developments in this discussion will be educational.
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Editor's note: The gallery presents images of Giga Shanghai.

About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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