Tesla, SpaceX and X owner Elon Musk is going to visit India later this month. During this time they will announce their investment plans in India. Musk will also meet PM Modi. According to some reports, Musk wants to open a Tesla factory in India for his electric car. But China has not liked this plan of Musk. Musk has held talks with the Indian government for a long time. They wanted to import cars into India at low customs duties, while the Indian government wanted them to manufacture their cars in India.
A new EV policy is being discussed
Elon Musk may announce Tesla’s entry in India after its new EV policy announced by the government last month. The government will allow import of fully built electric cars with a minimum cost, insurance and freight value of $35,000 (₹29.2 lakh) at 15% interest rate over five years in exchange for a minimum investment of $500 million to start local manufacturing. Import duty will be charged. India imposes import duty of up to 100% on fully manufactured cars.
China got chilli
But China is not liking Tesla’s possible entry into India. The Global Times, considered the mouthpiece of the Chinese government, has slammed India’s ambitious move to invite Tesla by predicting that it will not work, saying it seems like a decision taken too hastily, with little preparation. And not suitable for the immature Indian market. This disappointing comment ignores the fact that several large Chinese EV manufacturers had previously shown interest in manufacturing EVs in India, but were denied permission by the Indian government. India-China relations have deteriorated due to border disputes, over which clashes have already taken place. India has closely scrutinized Chinese investments and investigated several Chinese businesses for wrongdoings.
Tesla will not be successful in India: Global Times
Global Times said that Tesla will not be successful in India. He wrote, “Tesla mainly focuses on mid and high end sectors and mature markets. No one knows whether it will be successful in India or not. Although India’s EV market is growing, its size is small. “Some data suggests that EVs could account for only 2.3 per cent of total passenger vehicles sold in India in 2023.” The article questioned whether India’s immature market could digest enough Tesla cars and allow them to turn a profit. In this, supply chain was mentioned as another challenge. Global Times said, “Limited domestic production of key components such as lithium-ion batteries for EVs is one of the biggest problems. India is starting relatively late in trying to build an EV supply chain.”
The grapes are sour…
The article advised India to adopt a “realistic” approach. Global Times wrote, “In this process it is advisable that India consider strengthening cooperation with neighboring countries and promoting manufacturing development with a more pragmatic attitude.” Thus, Global Times wants India to manufacture EVs by Chinese companies instead of Tesla. The challenges listed by Global Times in its article are not things that threaten Tesla’s business. In fact the Chinese argument is a perfect example of the ‘grapes are sour’ argument. Because many Chinese EV companies tried to set up plants in India, but the Indian government did not give permission.
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