Elon Musk’s India Trip is scheduled to meet with Prime Minister Narendra Modi, just hours before Tesla Inc.’s quarterly earnings report and days after the company announced its biggest-ever round of layoffs. PM Modi, who is running for a third term in the largest election in the world, is also not taking a break from politics.
He has been touring states for election rallies just days after the polls opened. The fact that they are meeting early the following week highlights how important these meetings are for both men. Given China’s opposition to the American company, Musk sees the prize as India granting SpaceX’s Starlink Inc. permission to operate in what will be by far its largest market.
Elon Musk’s trip to India, the introduction of Tesla cars on the streets of Delhi and Mumbai, and the carmaker’s potential investment in manufacturing will enable PM Modi to position himself as a leader who is attracting marquee foreign investment to India, modernizing its cities into global metropolises, and creating job opportunities.
“It’s symbolic of the growing foreign investor interest in India,” said Sonal Varma, Nomura Holdings Inc.’s chief economist for India and Asia excluding Japan. “This is happening not only because companies are diversifying their supply chains from China for export purposes but also to capitalize on India’s burgeoning domestic demand.”
Reportedly, government sources have assured Starlink that it will commence operations in India in the third quarter of this year. This development signifies the conclusion of a prolonged standoff with the Modi administration and positions Starlink to compete more directly with two domestic competitors who were granted satellite-based internet service licenses in India last year. People familiar with the situation, requested anonymity because the information has not yet been made public.
India’s New EV Policy: Elon Musk’s India Trip
With the recent implementation of a new EV policy, India reduced import taxes for certain models from 100% to 15%. This is contingent upon the manufacturer establishing a factory and investing a minimum of $500 million.
According to earlier Reuters reports, Tesla representatives planned to travel to India this month to find potential sites for a $2 billion manufacturing plant.
Furthermore, Tesla has started producing right-hand drive vehicles at its German plant with plans to export them to India later this year.
Due to growing competition from Chinese automakers, Tesla’s primary markets—the US and China—are seeing a decline in the demand for electric vehicles at the same time as the company expands into the Indian market.
Tesla recently revealed a drop in first-quarter deliveries, which was less than anticipated by analysts.
India Automobile Market
Presently, India stands as the third largest automobile market globally and is experiencing rapid growth. The automotive industry currently has a market value of Rs 12.5 lakh crore, and by 2030, it is predicted to reach Rs 24.9 lakh crore. More than 7.1 percent of the GDP of the nation is generated by the automotive industry.