The Indian government had been courting Tesla for a while, but it now seems to have hardened its stance.
Former NITI Aayog CEO and G20 Sherpa Amitabh Kant has said that no policy changes will be made for any specific EV firms. Kant was answering a question on why Tesla didn’t come to India after CEO Elon Musk’s announcement. Kant said that India cannot have individual EV policies for every company. “So the policy has been announced. You can’t have policies for individual companies. The policy for EVs has been announced,” he said.
This is the first indication from the government that Tesla pulled out of its India visit at the last minute because it was still negotiating on the specifics of its India investment. On 10th April, Musk has posted on X that he was looking forward to meet PM Modi in India, in a visit that was supposedly scheduled on the 21st of the same month. But on 20th April, Musk backed out. “Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year,” he posted.
But a few days after the post, Musk had visited China, and met the Chinese premier. The visit had resulted in China approving Tesla’s self-driving product for use in China, which was thought to be a win for the company.
But given how Indian government officials are now saying that there won’t be special rules for Tesla, it’s apparent that Tesla — till the very end — was looking to negotiate special provisions for its India entry. It appears that India did not relent, which meant that the two sides couldn’t reach common ground, forcing Tesla to pull out.
This isn’t the first time that India and Tesla have failed to reach a deal over the company’s India entry — the two have been negotiating since 2017 — but the latest failure might be more serious than most. The optics of Musk cancelling his visit, and choosing to visit China a week later wasn’t lost on anyone in India, and public support for the electric automaker has declined substantially since. Also, while India would benefit from Tesla’s India entry, Tesla would gain substantially too — as growth in China is slowing, Tesla would have a chance to tap into the rapidly industrializing economy of 1.4-billion-strong India, where there is plenty of demand for Tesla’s cars. Also, Tesla doesn’t quite have the lead in EVs as it once did — Chinese companies like BYD are making high-quality EVs of their own, so Tesla is no longer the only game in town in the EV space. And with the Indian government hardening its stance about concessions to Tesla after the latest incident, Tesla’s entry into India doesn’t look likely in the foreseeable future.