Tesla Execs Will Reportedly Meet Indian Officials In Coming Days—In Push To Reduce Reliance On China


Tesla executives will visit India and meet with government officials later this week in an effort to expand its supply chain in the country, Bloomberg registeredmarking the electric vehicle maker’s latest effort to build a presence in the world’s most populous country and reduce its dependence on China.

Key facts

Citing unnamed company sources, Bloomberg reported that Tesla executives will meet with “government representatives,” including officials from Prime Minister Narendra Modi’s office, to “discuss local sourcing of components for Tesla models.”

The report added that Tesla’s contingent would include C-suite executives and supply chain managers, but no one was named.

Indian government representatives and Tesla leadership—including CEO Elon Musk—have previously clashed over the country’s high tariffs on imported vehicles, and the visiting CEOs are expected to raise the issue again, the report added.

Sourcing key components from India is likely an attempt to reduce its reliance on China amid rising tensions between Washington and Beijing.

What we don’t know

It is unclear how this plan will be received by Indian government officials and whether it will finally open the door for Tesla to sell its cars in India. Indian government officials have previously indicated they want Tesla to commit production its EV in the country, something that now seems unlikely. The Indian government has also indicated that it will not allow the carmaker to import vehicles produced at its Shanghai plant, due to political tensions between India and China.

Big number

100% That’s the total import duty India levies on foreign-made vehicles priced above $40,000 — including insurance and shipping charges. Tesla’s cheapest Model 3 costs more than $40,000 and would be subject to this duty, bringing its domestic price above $80,000.

Key background

Despite several years of speculation, Tesla cars are not officially available in India, the world’s third largest car market. Tesla CEO Musk has repeatedly blamed India’s high import tariffs, noticing that “they are the tallest in the world far from any major country”. The billionaire has urged The Indian government will allow temporary relief for electric vehicles, claiming it would be good for India’s climate goals. New Delhi has been lukewarm to Musk’s efforts and has indicated it will consider a request for lower tariffs only if Tesla commits to sourcing at least $500 million of its components from the country. Tesla isn’t the only automaker making these demands as both Volkswagen and Hyundai they also appealed for lower tariffs on imported electric vehicles.

Further reading

Tesla executives will visit India this week to Pivot Beyond China (Bloomberg)

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