When Tesla CEO Elon Musk planned his company’s India debut for summer 2017, it was a tall order. The carmaker had yet to set up dealerships and service centers, and its plan to install a cross-country network of superchargers was far from being realized. Moreover, Tesla’s trademark autopilot feature seemed ill-prepared for Indian roads plagued by poor infrastructure, deplorable driving skills, and swarms of reckless pedestrians.
When Tesla $TSLA CEO Elon Musk planned his company’s India debut for summer 2017, it was a tall order. The carmaker had yet to set up dealerships and service centers, and its plan to install a cross-country network of superchargers was far from being realized. Moreover, Tesla’s trademark autopilot feature seemed ill-prepared for Indian roads plagued by poor infrastructure, deplorable driving skills, and swarms of reckless pedestrians.
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Three months after that announcement, Musk himself has identified another roadblock: the country’s “Make in India” push which requires foreign companies to source at least 30% of their products locally. For Tesla vehicles, “the supply doesn’t yet exist in India to support that,” Musk tweeted on Monday (May 22).
One Twitter $TWTR user followed up by asking prime minister Narendra Modi to “reconsider local sourcing norms“ for Tesla.
Swedish furniture giant Ikea and iPhone-maker Apple $AAPL have both tried—and failed—to circumvent India’s sourcing requirements by getting a waiver. But Tesla might stand a better chance: Its “state-of-the-art” and “cutting-edge” cars align with the country’s clean-energy goals. Already, Tesla is providing solar energy in rural areas in India and the advent of electric cars could help the country curb its serious pollution problem. However, even a waiver would only buy Tesla a three-year reprieve from Make in India rules.
Tesla did not respond to a request for comment.
Electric cars make up less then 5% of India’s electric-vehicles market, dominated by scooters. The government is now vying to make all vehicles in India electric by 2030. Another possible hiccup? When Tesla Model 3 bookings opened in India last March, only the country’s elite were able to fork out the over $1,000 it needed.
