Tesla & India: Why has Elon Musk’s car not hit Indian roads yet?

The story so far: Dashing hopes of Tesla enthusiasts in India, Elon Musk — CEO of the automotive g

The story so far: Dashing hopes of Tesla enthusiasts in India, Elon Musk — CEO of the automotive giant — stated on May 28 that his company will not manufacture its electric cars in India unless it is allowed to first sell and service them locally.

Mr. Musk, who recently offered to buy the micro-blogging site Twitter, informed a Twitter user that he was awaiting the Indian government’s approval for launching Starlink – a global broadband internet system. When another Twitter user asked when he would set up a Tesla manufacturing plant in India, Mr. Musk shot down hopes citing the sales snag.

Indian car enthusiasts have often questioned Mr. Musk on Twitter about when Tesla cars will be made available in the country, but the Central government has firmly stated that the automotive giant must not ‘import cars from China’. Mr. Musk has repeatedly highlighted India’s high import duties on vehicles as the biggest snag for Tesla, opting for Indonesia instead of India to set up his new manufacturing hub.

In 2018, Tesla set up its first overseas car manufacturing hub, called Gigafactory 3, in Shanghai, China. It started production less than a year after construction began at the site in October 2019. As of 2021, this factory reportedly had a production capacity of 500,000 cars per year and could produce up to 450,000 total units of Model 3 sedans and Model Y crossover cars in the same time frame.

According to a calculation by Reuters using data from the China Passenger Car Association, cars produced at Tesla’s Shanghai factory accounted for half of the 9.36 lakh cars it delivered.

With the resurgence of COVID-19, Shanghai was forced to stall production in April 2022. According to a Reutersreport, local authorities in Shanghai’s Lingang Special Area helped transport more than 6,000 workers to restart production in Tesla’s Shanghai plant. The plant reopened on April 19 after being shut for 22 days, the longest period of time it has remained shut since the factory commenced operation in 2019.

Per a China News Service report, Tesla has also begun expanding its plant to add an additional annual production capacity of 4.5 lakh cars, taking the Gigafactory’s annual capacity to 1 million vehicles. In May 2022, Reuters reported that Tesla may open a new plant, with plans to produce up to two million cars per year at the expanded Shanghai factory.