Tesla 'has to be India' as Musk defers meeting with PM Modi: Analysts

EV industry experts says Tesla's presence in the country in inevitable as business slows down elsewhere

Tesla CEO Elon Musk deferring his India visit this week has had no effect on buzz that his company will eventually have a base for electric vehicles (EV) in the country.

Analysts say Musk deferred his visit to meet Prime Minister Narendra Modi due to Lok Sabha elections when the government attention is focused on campaigning and it cannot announce major policy.

Musk's visit was anticipated to unveil plans for a manufacturing plant, especially after the Centre's recent announcement of lower import taxes on certain electric vehicles.

However, just days before his scheduled visit, Musk cited "very heavy Tesla obligations" for the delay, expressing optimism for a later visit.

Meanwhile, Congress leader Jairam Ramesh labelled Musk's change in plans as a response to an outgoing administration, hinting at political shifts.

“It was odd that @elonmusk was coming all the way to India to meet an outgoing Prime Minister. He too has now read the writing on the wall and decided to put off his visit," he said.

“INDIA’s PM will welcome him soon, and the INDIA government will promote electric vehicles even more aggressively – I myself am a user of one!” he said.

Union Finance Minister Nirmala Sitharaman reiterated her government’s commitment to get investments. “When big companies show interest to come to India, we certainly make sure to make it attractive for them," she said. “Especially after China started being a concern for many industries or many experts in domain areas, we have made policies in such a way that we are making India an attractive destination, both for manufacturing and services.”

Musk could not come to India but Tesla will eventually have a presence in the country, according to analysts. Tapping into India becomes imperative for growth as Tesla's global profitability under pressure, Puneet Gupta, of S&P Global, was quoted as saying by the South China Morning Post (SCMP).

Musk's concerns about India's high import taxes prompted the government to introduce incentives for EV manufacturing. Elsewhere, Tesla has announced it will launch low-cost models as it steps up its existing cars.

Suraj Ghosh, an automobile industry analyst, said it is inevitable that Tesla will be in India, irrespective of specific car models. “India is one of the most important and fastest-growing markets, and eventually Tesla has to be here. India is going to be an important manufacturing hub and an important sales point,” he told SCMP.

Tesla is expected to announce its plan to set up a plant in India once it accepts the tax incentive under the new electric vehicle policy, Ghosh said.

Ghosh added that with a manufacturing foothold established, Tesla could potentially venture into the luxury car segment within the Indian market. He also noted that Tesla's vehicles are expected to occupy a favourable pricing spectrum, likely falling within the range of Rs 35 lakh to Rs 40 lakh (approximately US$42,000 to US$48,000).