Tesla won’t “make cars in India, sell in India, and export from India” anytime soon

Nitin Gadkari, India’s transport minister, during a climate action forum on Oct. 8 said, that he had requested Tesla not to sell China-made electric vehicles in the country. He instead wants the now-Texas-based automaker to “produce cars in India, sell in India, and export from India.”

tesla cars : export from india

However, the path to these goals is paved with speed bumps. Elon Musk, the company’s CEO, has frequently turned to Twitter to express his dissatisfaction with India’s local sourcing regulations and hefty import tariffs. The company hasn’t been able to sell a Tesla in India for nearly five years, much alone manufacture. This is primarily because the government hasn’t provided the concessions that would tempt it to do so.

The Indian market is not very attractive right now for Tesla, which produced nearly two-thirds of the 568,000 electric cars sold in the United States between 2017 and 2020. Despite a few ardent early adopters who have been waiting in line for quite some time, India’s electric vehicle sector is still in its infancy. Indians purchased fewer than 5,000 electric four-wheelers in 2019-20. The costs are high, and there is a lack of charging infrastructure.

Why the deal between India and Tesla is still not sound?

In 2019, Musk tweeted, “I’ve heard that import duties on electric automobiles are extraordinarily high (up to 100 percent).  This would make our cars unaffordable.” He is correct. Customs charge on fully manufactured imported automobiles costing more than $40,000—as Tesla does—is a whopping 100%.

tesla cars

These high barriers are meant to protect domestic manufacturers, but they may be too high for the price-sensitive market. Given the present price tag and taxes, even the least priced Tesla will likely set buyers back 55-60 lakh rupees (between $72,000 and $80,000), compared to the Rs 35 lakh ($) Gadkari estimates it will cost.

India recognizes the importance of electric vehicles in reducing air pollution and reducing its reliance on crude oil. Local production is the only option to make these cars inexpensive without import incentives. The 1.3 billion-strong nation has been attempting to entice Tesla with reduced production prices, hoping to capitalize on the world’s aversion to relying on China. A half-dozen Indian states have thrown out the red carpet for Tesla to build a factory.

However, the government appears to want to see precise manufacturing plans before giving the company any tax benefits.

Tesla profit surge, driven by record car deliveries

Tesla is reporting surging profits, despite shortages of semiconductor chips and congestion at ports hampering production. Tesla’s sales rose to $12bn (£8.6bn) in the three months to the end of June, up from $6bn a year ago.

Tesla CEO Elon Musk

Tesla’s sales rose to $12bn (£8.6bn) in the three months to the end of June, up from $6bn a year ago. This data comes when its US factory was shut down due to the pandemic. The electric carmaker claims to have delivered a record 200,000 cars to customers in the same period.

The company reported on Monday that profits soared off the back of strong sales. It also added that public support for greener cars was greater than ever. The profits for the second three months of the year were $1.1bn, up from $104m last year. The sales of Tesla’s cheaper Model 3 sedan and Model Y are bolstering the jump in profits.

tesla model 3

In an update to investors on Monday, the electric vehicle manufacturer said; Public sentiment and support for electric vehicles seem to be at a never-before-seen inflection point. The company is continuing its efforts to drive down costs. Moreover, the firm is aiming to increase its rate of production to make electric vehicles accessible to as many people as possible.”

Tesla said that the rate at which it could produce cars throughout the rest of the year would depend on the supply of key parts of its vehicles. The company is getting a new surge in demand at record levels.

Tesla CEO on Chip Shortage

Musk said, at this point, I think everyone can agree, electric vehicles are the only way forward. He also added that the global chip shortage remains quite serious. And, the manufacturing would hinge on this slowest part of the supply chain. Elon musk is continuously working alongside chips suppliers in an attempt to resolve the shortages.

Tesla gigafactory

There was a growing waiting time for Tesla cars, especially across Europe, due to chip shortages. The company is looking to start production at its new Berlin “gigafactory” as soon as possible. The plant has been plagued by delays, although the company calls it the most advanced high-volume electric vehicle production plant in the world.

In the meantime, Tesla will ramp up the manufacturing of its cars at its California hub. Musk was reportedly spotted in Luton earlier this year, sparking new rumors of a Tesla factory in the UK. Other giants in the electric vehicle segment, such as Ford and General Motors have been forced to suspend production temporarily in some US factories. Almost every player has taken a hit by the global shortage of semiconductors.

For more such news on Tesla or Elon Musk, keep watching this space!