Elon Musk postponed his visit to India, which was intended to include a meeting with Prime Minister Narendra Modi, citing pressing obligations at Tesla Inc. Originally scheduled for two days in April, the visit aimed to announce plans for Tesla’s entry into the Indian market. Musk expressed regret for the delay but expressed anticipation for a later visit within the year.
The decision to postpone came amidst a hectic week for Tesla. Musk announced a global reduction in headcount by more than 10%, while two top executives departed. Additionally, the company faced challenges such as a shareholder vote on Musk’s compensation package, a product recall, and a price cut on its cars in the US due to slow sales and rising inventories.
Tesla’s upcoming first-quarter earnings report adds to the pressure, with vehicle deliveries already falling below estimates by a significant margin. The company’s stock has declined over 40% in the year, impacting its market value.
Elon Musk (Credits: ZAWYA)
Musk’s visit to India was significant for both him and Modi, especially amid India’s national elections where Modi sought a third term, highlighting the nation’s economic progress. Investments from figures like Musk could bolster Modi’s appeal to voters.
In addition to Tesla’s market entry, Musk also seeks permission for SpaceX’s Starlink to operate in India, potentially its largest market yet. India’s government has given assurances of Starlink’s operation starting as early as the third quarter of the year.
For Tesla, breaking into the Indian market has been a long-standing goal hindered by high import taxes. However, recent reductions in import taxes for EVs from foreign manufacturers who invest and commit to local production could pave the way for Tesla’s entry. A substantial investment by Tesla would allow Musk to tap into India’s growing electric vehicle market, countering sluggish demand elsewhere.
While the potential investment is promising, Tesla’s history of project delays, such as the construction of a plant in Mexico, raises concerns among observers. Action on the ground would be crucial for Tesla to demonstrate its commitment to its plans in India and beyond.
