Tesla’s senior executives are set to visit India this week for crucial meetings with government officials. The visit comes as Tesla aims to broaden its supply chain beyond China, as reported by Bloomberg. The executives, including C-suite members and managers from the supply chain, production, and business development teams, will discuss local sourcing of components for Tesla’s models with government representatives, including those from the office of Prime Minister Narendra Modi.
This visit could signify a positive shift in the previously strained relationship between India and Tesla. Elon Musk, Tesla’s CEO, has previously criticized India’s high import taxes and electric-vehicle policies. Conversely, India has advised Tesla against selling cars in the country that are manufactured in China.
Tesla’s primary objective during the visit is to request a reduction in import taxes on its vehicles. By expanding its supply chain in India, Tesla aims to diversify its operations away from China while aligning with the Indian government’s vision of making India a global manufacturing hub. However, the Indian government has been cautious about Tesla, urging the company to refrain from selling cars assembled in China due to an ongoing border dispute.
Last year, Union Minister of Road Transport and Highways, Nitin Gadkari, stated that any brand is welcome in India as long as it is manufactured in the country. Companies that solely use India as a market without manufacturing components and vehicles locally are not encouraged.
Despite challenges in entering the Indian market, Tesla’s competitors like Mercedes-Benz AG have made progress by selling locally assembled cars. However, Tesla has no plans to establish manufacturing plants in India due to restrictions on selling and servicing its vehicles. Nevertheless, the company acknowledges the need to diversify beyond China given the ongoing trade tensions.