The 5 major states scrambled to invite Tesla to set up the factory, and Musk dismissed exposing India's lagging behind China

For several years, India has been hoping that Elon Musk can invest in India to set up a factory, and recently, Tamil Nadu has also issued an invitation to Musk to come to the state to cooperate in the field of renewable energy, and the state's minister of industry said that Tamil Nadu accounts for 34% of the total planned investment in electric vehicles. Welcome to india's electric car capital. In addition, Tamil Nadu is one of the nine largest renewable energy markets in the world, so he invited Elon Musk to work with the state in the renewable energy market.

Over the past few days, Elon Musk has said that his electric car manufacturing company is "still tackling many challenges with the (Indian) government", and that India's Trengana, Punjab, West Bengal, Tamil Nadu and Maharashtra are all strongly inviting Elon Musk to establish a manufacturing unit there, so they have expressed their willingness to help Tesla overcome the current "challenges". However, Indian media commented that these politicians seem to have misunderstood Elon Musk's statement because Tesla simply does not intend to build a local manufacturing plant in India, at least for now.

In fact, the Indian central government has already invited Tesla to set up a factory in India, but Tesla does not have a plan to set up a factory in India, but requires India to reduce or exempt tariffs.

So why is Tesla reluctant to set up a factory in India?

This is mainly because the market for electric vehicles in India is still small, with a share of the world market still below 1%. Roads in India are still dominated by cheap petrol and diesel cars produced by companies such as Maruti Suzuki, Hyundai Motors and Tata Motors. Despite recent moves by the central government to encourage more domestic companies to produce electric vehicles, demand for such cars remains low. The reason for the low demand also includes the lack of supporting infrastructure and high costs for electric vehicles.

In addition, the price of Tesla cars is higher, coupled with tariffs, so Tesla is a high-end car in the Indian market, as mentioned earlier, India is still dominated by cheap cars. So, given the market share of electric vehicles and the price of Tesla vehicles, "Tesla does not want to immediately commit to setting up a local factory in India", at least not for the time being.

So Tesla is just hoping india will lower tariffs--- Elon Musk and Tesla executives have been negotiating with the government over high import tariffs — a 100 percent exemption — and even so, these cars are still much more expensive than the average car sold in India. That is, Tesla wants to import cars into India and sell them in the local market. But the Indian government says Tesla can only reap the benefits of the Production-Linked Incentive (PLI) program if it produces locally.

The Indian government is also very firm, and it has made it clear that if Tesla does not set up factories in the local area, there will be no import tariff reductions or other benefits. Such a huge disagreement has led to the current stalemate.

The White Navy said that Musk was dismissive of the invitation of India's 5 major states, in the final analysis, it was not worth looking at India's less than 1% market share--- Indeed, in business, Musk's consideration is normal, such a market is indeed not worth setting up a factory. As a result, it also reveals that although India is an emerging large market, it is still significantly behind China.