Tesla may not sell Giga Shanghai-produced cars in India: Road Transport Minister

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India and China aren't best buds right now.

New Delhi, October 8

Military patrol parties of India and China stood face to face for hours just north-east of Tawang in Arunachal Pradesh on September 30.

Both sides insisted on each other to return, said sources, adding that no one was detained, just that patrol parties came face to face and stood their ground. To say one patrol party detained the other would be incorrect. The patrol of the People’s Liberation Army (PLA) had 200 men.

The incident happened between Bum La, a 15,200-ft-high pass, and Yangtse, an Indian border outpost 25 km east of Bum La. Things are now back to normal, said the sources. Patrol parties come face to face dozens of times in a year as both sides undertake patrolling up to their line of perception of the Line of Actual Control (LAC).

Tesla may not sell Giga Shanghai-produced cars in India: Road Transport Minister

Indian Road Transport Minister Nitin Gadkari nailed the point that Tesla will not be able to export Giga Shanghai Model 3 and Model Y vehicles from China to India. It is the most recent development in Tesla’s road to sell and manufacture its vehicles in India, a process that has taken over four years to configure.

Gadkari has been in contact with Tesla officials for several days, he says. However, he has repeatedly told the company’s executives that cars sold in the Indian market must be manufactured there, and the government will not accept any imports from other countries. Tesla has established its Chinese production facility, known as Giga Shanghai, as somewhat of an export hub in 2021. It all began in January when the automaker went back on its word that it would not ship China-built cars to Europe to handle demand spikes.

The company sent 7,000 Model 3 units to other countries from China within the first two weeks of the New Year. Then, the Model Y started being shipped to Europe from Giga Shanghai just last month, as Tesla’s European Gigafactory, known as Giga Berlin, has not yet been completed. However, European demand for the Model Y convinced the automaker to abandon its non-export stance, and Shanghai has supported both the Chinese market and some parts of the European market for months.

Most importantly, Gadkari is in no way trying to make things more difficult for Tesla to enter the market. Instead, he is making it a fair playing field for both the automaker and the country, which ultimately both need to benefit from the potential partnership. Gadkari told Tesla that any of the company’s needs would be taken care of by the Indian Government, the automaker just needs to manufacture its vehicles domestically.

“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,” Gadkari told Hindu Stan Times. “Whatever support you (Tesla) want, will be provided by our government.” Gadkari also stated that there are ongoing discussions concerning Tesla’s requested tax rollbacks on imports.

Since India and Tesla have started to more seriously consider the advantages of building the world’s best electric cars in the country, there has been a hypothetical game of “Chicken” going on. Tesla was granted business licenses to sell and build electric cars in the region in the early parts of 2021, and it seemed that the expansive team of Tesla executives the company put together for India all but solidified that Elon Musk’s EV company would be present in the country in the coming months. However, Tesla wished to test demand for its cars through imports, a strategy that India’s politicians were not keen on, especially considering they are unwilling to move away from business practices that would favor manufacturing in other countries.

Musk was not in favor of taking such a massive risk by building a production facility in India without knowing whether its vehicles would provide growth opportunities for the company. Tesla is riding a streak of eight consecutive profitable quarters, with its ninth expected to take place after the conclusion of Q3 2021. Financials, growth, and profitability are currently in the company’s best interest, of course. However, building a possibly $1 billion production plant in a market that it has never tested would essentially be a huge risk that could end up as a catastrophic failure.

It is only a safe business practice and strategy for Tesla to save potentially billions of dollars on a project that may not be successful. However, it is an advantage of Tesla’s to have such strong support from India’s government, especially as the company begins to expand into markets that are not necessarily EV hotspots.

https://www.teslarati.com/tesla-india-no-giga-shanghai-imports-gadkari/
 

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In no way making things more difficult, the minister said while making things more difficult.

-Crissa
 
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