Tesla CEO Elon Musk is expected to travel to India in the coming weeks to meet with Prime Minister Narendra Modi, fueling speculation that the electric vehicle maker will announce a new investment in the country.
The billionaire will meet with Modi during the week of April 22 in New Delhi, India’s capital, and will make separate announcements about Tesla’s India plans, Reuters reported Wednesday. However, the sources said Musk’s agenda is subject to change.
The trip comes as India enters into a two-month-long election on April 19, in which Modi is widely expected to cruise to victory and secure a third term in office. Nearly 1 billion people are eligible to vote in the election and results will be made public on June 4.
“Looking forward to meeting with Prime Minister @NarendraModi in India!” Musk wrote on X, the social media website he owns, Wednesday, confirming Reuters’ reporting.
Here’s what we know.
India (finally) gave Tesla a major boon last month
India’s federal government last month lowered import taxes on select electric vehicles made by automakers under certain conditions. The move comes after years of lobbying by Tesla officials and primarily benefits Musk’s company.
The government will require car companies to commit to investing at least $500 million and begin domestic manufacturing within three years to qualify for lower taxes. In return, automakers that meet those requirements will be allowed to import up to 8,000 EVs that cost $35,000 or more annually at a tax rate of 15%.
Under current regulations, India levies taxes of 70% or even 100% on imported EVs, depending on their value. Electric vehicle imports at the lower tax rate will be allowed for a maximum of five years.
India’s Ministry of Commerce and Industry said the new policy will “strengthen the EV ecosystem by promoting healthy competition among EV players” and lead to lower production costs and higher production volume, among other things. It will also “boost the Make in India initiative,” Modi’s aggressive years-long push to strengthen India’s manufacturing industry.
Tesla has been lobbying New Delhi to lower import taxes on EVs for years, but local manufacturers have opposed any changes. Musk has frequently cited high import taxes as the primary reason Tesla hasn’t greatly invested in India. The company’s plans to sell its cars in India as soon as 2017 were delayed due to the country’s high taxes.
In July, Tesla representatives reportedly discussed plans to build a factory that would make an all-new $24,000 EV. Later this month, company representatives are expected to scout locations in India for a new local manufacturing plant that would require a $2 billion investment, Reuters reported.
They’ve met before
Although their most recent face-to-face meeting was last June, Modi and Musk have known each other for more than a decade.
The Indian prime minister toured Tesla’s Fremont, California, facility in September 2015. Musk and then chief technology officer JB Straubel showed Modi and his entourage around the facility and showed off Tesla’s lithium-ion battery packs, according to videos posted online. Musk and Modi also discussed how batteries and solar panels could help generate electricity in India’s rural areas.
Last year, Musk admitted that he was a “fan of Modi” and that he was “incredibly excited about the future of India.” About a month before his meeting with Modi, the Tesla CEO had said his company would pick a location. for a new Tesla factory by the end of 2024 and expressed interest in India.
“I am confident that Tesla will be in India and will do so as soon as humanly possible,” Musk told reporters last June.
Sealing the deal
Tesla has reportedly engaged in discussions with several local companies to help ease its push into the Indian market.
Tata Electronics — which recently took over some production of Apple’s iPhones in India — has signed a strategic deal with Tesla to make semiconducter chips for the EV maker’s global operations, according to the Economic Times. The deal was agreed to “a few months ago,” according to the paper.
Tata has invested $14 billion into its semiconductor business and has facilities in at least three states. In recent months, the company has engaged on a recruiting spree, hiring experts from around the world, according to the Times.
And the Hindu Business Line, citing “high placed sources,” has reported that Tesla is discussing a potential joint venture with Reliance Industries to build an EV manufacturing facility in India. The conglomerate — owned by Mukesh Ambani, India’s richest man — is expected to have a significant role in helping Tesla establish a factory and associated operations, according to the newspaper.
A poor first-quarter and more promises
The meeting with Modi is expected to occur during the week of the 22nd, according to Reuters. On that Tuesday, April 23, Tesla will report its full first-quarter earnings after the bell.
The EV maker has already reported its deliveries for the January to March period, revealing a disappointing quarter that one analyst named a “nightmare.”
The automaker said it delivered 386,810 electric vehicles over the first three months of 2024. That fell wildly short of Wall Street’s expectations and raised new doubts from investors, with Deutsche Bank analysts noting that the disparity between vehicles sold and vehicles made confirms that “there may also be a serious demand issue.” Wells Fargo analyst Colin Langan has also called Tesla a “growth company with no growth.”
Tesla investors are hoping for a lot of new information to be revealed by the earnings report and Tesla’s earnings call scheduled for later that day.
After denying a report that Tesla would cancel its plans for a $25,000 EV, Musk promised investors that a self-driving robotaxi would be unveiled on Aug. 8, although there are a several reasons that analysts and investors are skeptical. The company is also expected to face questions related to its settlement of a lawsuit with the family of a diver who died in a 2018 crash involving the use of Tesla’s driver assistance program, Autopilot.
Tesla is also facing its latest lawsuit over labor rights violations from former workers at the Fremont facility, which has been accused of being a hotbed of racist and sexist harassment. Two ex-Tesla employees accused the company of failing to compensate workers for overtime, sick pay, vacation pay, and meal and rest breaks, as well as failing to provide written descriptions of mandatory quotas.
If Musk can provide some good news for investors — especially related to India — it may help give Tesla’s stock a much-needed boost. Tesla shares are down almost 1% in trading Thursday and have shed more than 31% this year, making it the worst performer in the S&P 500.