Tesla and the Indian government are in a "strange stalemate" The new government budget has become a key node

According to media reports on Thursday, the matter of Tesla's entry into the Indian market has reached an impasse in negotiations because neither the electric car leader nor the Indian government is willing to "give way" on core concerns.

The contradiction between the two sides is also simple. Although Tesla is eager to enter the Indian market to sell cars, the country's high import car tax is the biggest obstacle at the moment; the Indian government also wants to introduce Tesla, but emphasizes that local investment by US car manufacturers is a prerequisite for any preferential tax rate policy. On this issue, Tesla's current position is to sell the car first, and then consider subsequent investment.

Negotiations are deadlocked

According to people close to Tesla, Tesla's consultations with the Indian government are currently in a "weird stalemate."

For nearly a year, Tesla and the Indian government have repeatedly negotiated on related issues, but a series of lobbying has not been effective. According to Indian officials, the main reason Tesla's lobbying has not worked is that the company has not yet proposed a precise plan to invest in India. India wants to see investments linked to the Modi government's "Make in India" vision to boost local manufacturing and jobs.

It is reported that compared with direct investment in the construction of factories, Tesla proposed to the Indian government to purchase more auto parts from the local area, and eventually led to local production, but the government did not buy it.

A senior official said, "If they don't want to make any investment here, how do you make sure that model works?" ”。 The official also revealed that lowering import taxes is "highly unlikely" to happen in the near future.

According to India's current tax rate, a 100% tax rate is required for imported cars, and the amount of tax includes the complete landing cost of the car - in addition to the value of the car itself, it also needs to be included in freight. Referring to Tesla's price, Indian users spend nearly $40,000 just to pay taxes, making most users have no reason to buy this car.

February 1 is the key milestone

For now, the timing of the Release of the Federal Budget by the Indian government on February 1 will be the next key point in this event. India usually announces tax rate adjustments alongside the budget, which can also show whether Tesla's lobbying is effective. If it doesn't work at all, companies also need to rethink how to enter the Indian market.

In a last-ditch effort, Tesla recently held talks with India's tax and customs authorities. Earlier, Tesla also met with Modi's office to seek arrangements for Musk to discuss the company's plans for India in person with the Indian prime minister.

A not-so-good news for Tesla is that the Modi government is highly focused on homegrown manufacturing and usually takes a tough stance on requests from foreign companies. Apple had exchanged local manufacturing in 2017 for preferential tax rates, but most of the company's requests were rejected by the Indian government.