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But at a policy level, India appears to be making every effort to woo the carmaker.
The country has outlined an ambitious national vision to go electric. It plans to have 30% of private cars, 70% of commercial cars, 40% of buses and 80% of two and three-wheelers go electric by 2030. Most provincial governments have also established their own EV policies to incentivise demand and supply.
Subsidies offered by India on electric cars are also the highest among major economies, according to HSBC Securities. They amount to as much as 46% of the price of the country’s top-selling electric car model.
It’s no surprise then that passenger EV sales have grown astronomically by over 2,000% in less than five years – going from a low base of 4,700 annually to a 100,000 cars.
“The price difference between regular cars and EVs has reduced a lot, making customers rethink their choice,” says Jyoti Gulia, founder of JMK Research.
In April last year, India also cut import taxes on EVs for global carmakers which committed to investing $500m (£400m) and starting local production within three years.
Tesla and other imported electric vehicles costing over $35,000 (£27,550) can now enjoy a lower import duty of 15% on up to 8,000 vehicles. This came after Musk complained that high import duties had prevented the firm from launching its cars in the world’s fastest-growing major economy.
“It’s quite clever, as it forces a global player to localise – which is the way the game works: come and build in India,” says Sorabjee.
The proposed policy could put Indian domestic carmakers at a disadvantage, however, given that the investment requirement for foreign players is “not significant” compared to Indian players in this segment, an HSBC research paper warns.
Import duty of 15% is also “much lower” than the tax on comparable combustion engine cars in India which also pay an additional road tax, according to HSBC.
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