Driving China on January 20, 2022, people familiar with the matter reportedly said that negotiations between the Indian government and Tesla on potential tax incentives are deadlocked, because the Indian government is not keen to give the company any preferential treatment in the case that Tesla has not committed to local production.
Tesla, eager to import and sell its electric cars in India, has been lobbying Indian government officials for nearly a year to lower tariffs. Tesla CEO Musk has said that India's tariff level is among the highest in the world.
Indian government sources say they are not convinced by Tesla's lobbying because the company has not shared any definitive plans to invest in India.
India currently imposes import taxes of up to 100% on electric vehicles, and the so-called landing costs (car prices plus inbound freight) for these cars are $40,000 or more. This will make India the most expensive market for Tesla cars in the world, leaving the company's cars out of reach for most Indian consumers.
Tesla has informed Indian officials that the company is open to sourcing more auto parts locally and eventually moving to manufacturing, but Indian government sources say they want a firm commitment.
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