Regulations Are Preventing Tesla’s Entry Into India, Says Elon Musk

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Elon Musk, the chief executive officer of Tesla tweeted that a restrictive policy environment in India is the primary reason that Tesla’s entry into the subcontinent is being fraught with hurdles. 

Earlier this month, the Palo Alto, California-based company moved a step closer to establishing a factory in China. This would be its first production facility outside U.S. shores, as the Asian giant eases rules for carmakers such as Tesla

Despite Prime Minister Narendra Modi’s assertions that “more than 1,400 archaic laws that were an obstacle to doing business have been abolished,” India still isn’t the top pick for many foreign investors. 

Musk said last year that Tesla was in discussions with the government, requesting a temporary waiver of import penalties and other restrictions until a local facility is built. 

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India’s tax structure, which is keeping Tesla at bay, is changing rapidly to facilitate a shift to environment-friendly cars, Transport Minister Nitin Gadkari had said in January. Modi had set a goal for all newly sold cars to be electric models by 2030, a target seen as too ambitious by carmakers because of poor infrastructure and limited manufacturing capabilities.

Also, cheap fossil fuel-driven cars and an absence of state subsidies for electric vehicles make it important for the government and companies to make huge purchases of the EVs. Experts feel that if these large procurement programs falter, auto-makers would prolong any plans they have to introduce mass-market EVs in India.

Also, it is important to remember that Modi’s Make in India campaign envisages creating the world’s next manufacturing hub by encouraging domestic and foreign companies to set up factories locally.

Last month, homegrown cab-hailing major Ola has announced Mission Electric, a programme to launch 10,000 electric vehicles, most of them three-wheelers, over the next 12 months. The move comes one month after the Bengaluru-based firm roped in Anand Shah, the former executive at German premium carmaker BMW, to head its electric vehicles programme.

Mission Electric stems from India’s first electric-vehicle pilot project in Nagpur launched less than a year ago. 

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