Déjà vu. Tesla (TSLA) is reportedly exploring entering the Indian auto market again after several failed attempts over the past few years.
India is the biggest car market Tesla has yet to enter.
Tesla has been trying to enter the Indian car market for years, but has been unable to find a way to protect the country, including high import duties on imported cars.
The Indian government wanted Tesla to build a factory in the country, but the automaker preferred to first establish a domestic market with imported cars before investing in a local manufacturing plant.
Earlier this year, we reported that India finally came to an agreement on its import tax on cars to open the way for Tesla and other EV manufacturers to launch in the country.
The agreement involves significantly reducing the import tax on a limited number of electric vehicles as long as the automaker makes a significant investment and commitment to build an electric vehicle factory in India in the coming years.
It seems that Tesla has a hand in making that deal happen considering that the automaker was working with the government, and there were indications that Tesla was going to take them out of the deal.
CEO Elon Musk planned to travel to India shortly after the deal was announced – hinting at a deal for Tesla to launch in the market and build a factory there.
However, the CEO canceled his trip to India at the last minute and went to China instead.
It didn't look like Tesla would take up the Indian government's offer as the American car company's efforts in the market seem to have stalled, but now things are moving again.
Reuters reports that Tesla is now in talks with DLF Group about acquiring a showroom in New Delhi:
Tesla, which has paused its search for a showroom in India in recent months, is now in early talks with DLF to help secure a location in the capital, said the two sources, who have direct knowledge of the situation.
However, the talks are reportedly still in the beginning and have not been able to conclude anything.
Under India's current new program for foreign EV manufacturers, import tariffs are limited to only 15% and apply to only 40,000 vehicles, no more than 8,000 per year.
An automaker that benefits from those low import costs also needs to make ~$500 million USD in local EV manufacturing within 5 years, but it should start within 3 years of first importing.
Electrek's Take
The deal wasn't great, but the Indian market is big enough to convince a few EV automakers to take that route.
It would make sense for Tesla to start delivering its higher-end, more expensive cars and take orders for its cheaper lineup.
It will help in getting an idea of the demand while establishing its infrastructure before the big launch and domestic production.
FTC: We use auto affiliate links to earn income. More.