Elon Musk’s attempt to strike a fine balance between his commercial interests in both India and China has received a severe blow from Nitin Gadkari. India’s Minister for Road Transport & highways has drawn a clear distinctive line between doing business in India and catering to China’s interests.
First produce in India and then sell abroad, says Gadkari
Nitin Gadkari asked Elon Musk to start producing electric vehicles in India, instead of selling China-manufactured cars in the Indian domestic market. Assuring Tesla of all necessary support, the minister also asked Musk to export made-in-India Tesla cars.
Addressing the Indian Today Conclave 2021, Gadkari said- “I have told Tesla that don’t sell electric cars in India which your company has manufactured in China. You should manufacture electric cars in India, and also export cars from India,” He further added- “Whatever support you (Tesla) want, will be provided by our government.”
Tesla has been eyeing the Indian market for 5 years
Tesla has long been eyeing India’s huge automobile market to sell its much-coveted electrical vehicles.
- In 2016, Musk had added India to the list of the countries where the Tesla Model 3 would be available.
- He had also announced his plan to bring a ‘nation-wide supercharger network’ to India.
- The plan was later dumped because, under the make-in-India initiative, India had directed companies to use at least 30 per cent of the components from Indian local suppliers in their vehicles.
The talks of Tesla cars being sold into India again caught up the heat in 2019 when Elon Musk tweeted about high import duty in India. In his tweet, he had said-“I’m told import duties are extremely high (up to 100 percent), even for electric cars. This would make our cars unaffordable”. But, the Modi government insisted on its policy of protecting its domestic car manufacturers and asked Musk to establish his electric vehicle factories in India.
I’m told import duties are extremely high (up to 100%), even for electric cars. This would make our cars unaffordable.
— Elon Musk (@elonmusk) August 1, 2019
Musk’s love-affair with China
After setting up its factory in Shanghai in 2019, Tesla has currently ramped up its production facilities to produce more than 2,50,000 cars per year. In 2020, the Chinese market accounted for 21 per cent of Tesla’s vehicle sales revenue, second after the United States. Elon Musk even donated 5 million Yuan to the Chinese Center for Disease Control and Prevention to help them in fighting Covid-19.
Tesla will deliver the first China-made Model 3 at Gigafactory 3 plant in Shanghai TODAY. The 15 customers who are slated to get their Model 3s first are Tesla employees. pic.twitter.com/bOTeR8wjUL
— Tesla Greater China (@teslacn) December 30, 2019
Recently, the Indian government launched a whopping Rs 26,000 Crores PLI scheme to accelerate the production of electric vehicles in the country. This is in line with India’s Paris climate goals to Increase the share of non-fossil fuels-based electricity to 40% by 2030.