'Not India’s loss': Ola's Bhavish Aggarwal on Tesla's withdrawal from India
Bengaluru: Tesla's decision to forgo investment in the Indian market represents a significant missed opportunity for the US-based company, not for India, according to Bhavish Aggarwal, CEO of Ola Cabs.
Bloomberg reports that Tesla has not responded to New Delhi officials and is no longer anticipated to invest in India.
This comes after Elon Musk postponed his visit to the country, attributed to Tesla's financial challenges.
In a post on X (formerly Twitter), Aggarwal said, “If true, this is Tesla’s loss, not India’s. While the Indian EV and Lithium ecosystem is early, we’re gaining momentum quickly. It’ll be too late for Tesla when they look at India seriously again in a few years.”
If true, this is Tesla’s loss, not India’s. While the Indian EV and Lithium ecosystem is early, we’re gaining momentum quickly. It’ll be too late for Tesla when they look at India seriously again in a few years. https://t.co/k7EsPGp9LP
— Bhavish Aggarwal (@bhash) July 4, 2024
Tesla has faced a second consecutive drop in global deliveries this quarter and is contending with increased competition from China.
Further, the automaker has announced job cuts, sold its flagship Cybertruck stall, and delayed the construction of its plant in Mexico.
The report indicates that the Indian government might now focus on domestic companies like Mahindra & Mahindra and Tata Motors to boost electric vehicle (EV) production in the country.
In April, Musk cancelled a scheduled trip to India, where he was supposed to meet Prime Minister Narendra Modi, due to urgent company matters.
Initially, Musk had planned the visit shortly after India lowered import taxes on electric vehicles for foreign manufacturers.
These manufacturers are required to invest at least Rs 4,150 crore and start local production within three years.
In March, the Indian government approved an Rs 41.5 billion ($500 million) EV policy to attract global EV investments and position India as a major manufacturing hub for advanced EVs.
The policy aims to provide Indian consumers with advanced electric vehicle models, support the 'Make in India' initiative, reduce production costs, cut oil imports, decrease urban air pollution, and promote a competitive domestic auto manufacturing sector.
The policy mandates a minimum investment of Rs 41.5 billion with no upper limit, setting a three-year timeline to establish manufacturing facilities and commence commercial EV production.
Companies must achieve 25% domestic value addition (DVA) by the end of the third year and 50% by the end of the fifth year. A 15% customs duty will be imposed on completely knocked down (CKD) units with a cost, insurance, and freight (CIF) value of $35,000 or more for five years, provided manufacturing facilities are set up within three years.
The duty exemption will be limited to the investment made or Rs 64.84 billion, whichever is lower, with a maximum import limit of 40,000 EVs at a rate of no more than 8,000 per year for investments of $800 million or more.
Annual import limits that remain unused can be carried forward.
Investment commitments need to be backed by a bank guarantee, which will be enforced if the Domestic Value Addition (DVA) and minimum investment requirements are not met.
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