Many Indian states have invited Tesla to set up shop, just days after Elon Musk, the company’s billionaire founder, said the electric carmaker is still dealing with numerous challenges from the federal government.
Musk responded to a request for an update on the company’s much-anticipated launch in the country with a tweet on January 13 that said, “Still working through a lot of challenges with the government.”
It’s been almost a year since Tesla opened its Bengaluru office. The Karnataka government is in talks with the US company, but its entry into India is contingent on the central government’s approval. While India wants Tesla to build a factory there, Musk wants import tariffs lowered so that his company can first establish a market in the country.
Meanwhile, states such as Maharashtra, Telangana, West Bengal, Punjab, and Tamil Nadu have offered space and attractive incentives to entice Tesla to invest in their respective regions, promising not only jobs but also bragging rights and a platform to attract more big brands.
The entry of Tesla into India is expected to encourage greater adoption of green vehicle technologies, which will help to reduce carbon emissions. It would be in line with Prime Minister Narendra Modi’s government’s climate-friendly policy goals.
The offers from other states were “just posturing,” according to a Karnataka official, because the company’s problems, such as high customs and import duties, can only be solved by the Indian government. “We had a meeting, and they are having problems with the Indian government,” the official said on condition of anonymity.
The Karnataka government has attempted to keep the proposed investment under wraps, believing that too much attention on the issue would jeopardise the company’s plans.
Last year, Tesla registered a subsidiary company in India, signalling the Cupertino-based electric vehicle manufacturer’s intention to corner a larger share of the largely untapped domestic sustainable automobile market.
Musk’s tweets, like most of his views, piqued the interest of the federal and provincial governments.
BS Yediyurappa, the then-chief minister of Karnataka, was asked to take down a tweet in which he announced that Tesla would soon be manufacturing electric vehicles in the state because it would complicate the proposed investments.
“Karnataka has emerged as India’s EV hub, with over 400 R&D centres, 45+ EV startups, and an EV cluster near Bengaluru. Mr. @elonmusk, Karnataka would be an excellent location for a @Tesla factory. “Bengaluru is already Tesla’s first address in India,” said Murugesh Nirani, Karnataka’s minister for large and medium industries, in a tweet on Tuesday, following weekend tweets from politicians from other states inviting Tesla to set up shop in their states.
According to its filing with the Registrar of Companies, Tesla India Motors and Energy Private Limited is a subsidiary of a foreign company. Its registered office is located on Lavelle Road in Bengaluru’s upscale district. According to the filings, the subsidiary has a paid up capital of 1 lakh and an authorised capital of 15 lakh.
The three directors for Tesla’s new entity are Vaibhav Taneja, Venkatrangam Sreeram, and David Jon Feinstein.
While the Karnataka government had rolled out the red carpet for Tesla for any type of investment, sources close to the situation said that the first step would likely be the establishment of a research and development centre in Bengaluru.
Officials later stated that they would be looking for space to begin selling their vehicles in India, the world’s fourth largest automobile market.
Several Bengaluru-based startups, including Ola, Uber, Bounce, and Vogo, have made significant inroads into the EV space. They’ve set lofty goals for themselves to incorporate more electric vehicles into their fleets.
Ola, based in Bengaluru, has invested Rs 2,400 crore in a two-million two-wheeler EV plant in Tamil Nadu, a neighbouring state.
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