Reuters: Tesla's India business has suffered setbacks, and Musk said he will work with the Indian government to address the challenge

According to Reuters, Musk responded on Twitter on Thursday to a question about when to launch electric cars in India, saying that Tesla is "still working with the government to tackle many challenges" in India.

Image source: Network

Tesla plans to start selling imported cars in India last year and has been lobbying the Indian government to cut import taxes on electric cars before Tesla enters the market. Last October, Tesla made a request to Indian Prime Minister Narendra Modi's office.

Musk did not point out in his tweet what the "challenge" being dealt with was.

India's high-end electric vehicle market is still in its infancy, and charging infrastructure is scarce. Of the 2.4 million vehicles sold in India last year, only 5,000 were electric, a few of them first-class.

India imposes import tariffs of up to 100 percent on imported cars, including electric vehicles, which Musk has previously said is the highest in the world. Analysts say Tesla cars cost too much to many buyers at such a tax rate, which would dampen sales.

Tesla's demand for tax cuts has sparked opposition from several local Indian businesses. The companies said the move would hamper investment in India's domestic manufacturing sector.

Indian government officials are also divided over Tesla's requirements. Some officials want the company to commit to local manufacturing before considering any tax breaks, but Tesla says it wants to try imports first.

While Tesla insists on cutting import tariffs, luxury automaker Mercedes-Benz will begin assembling an electric version of its flagship S-Class sedan, the EQS, in India later this year. (Proofreading/Hidden Drei)