Tesla, Inc.TSLA's India foray has long been delayed as the world's largest EV maker continues to iron out differences with the Asian country with huge market potential.
What Happened: While speaking at en event, India's Transport Minister Nitin Gadkari said Tesla should not be looking to sell Made-In-China EVs in India. Whatever support Tesla may require to manufacture cars domestically will be provided to the company, he added.
The comments do not come as a surprise, given the ongoing borders tensions between the countries.
The Indian government expressed willingness to discuss tax concessions with Tesla, as the company seeks to make its cars affordable in the country.
India has one of the highest import duties in the world, with completely-built vehicles attracting duties as high as 60-100%, contingent on the engine size and cost, insurance and freight value.
Why It's Important: Tesla is developing its Giga Shanghai as an export hub and the cost of the vehicles manufactured at this facility is relatively cheap, allowing the company to enjoy a higher margin.
With the opening of the Giga Berlin now inordinately delayed, Tesla began exporting its MIC Model Y vehicles manufactured from China to European countries earlier this year. The breakup of Tesla's China wholesale sales into domestic and exports, both in July and August, highlight the export hub status of the Giga Shanghai.
India's stance of not allowing MIC EVs into India is at odds with Elon Musk's assertion that he wishes to test the waters in India with exported cars before committing to an investment in domestic production in India.
Tesla shares ended Friday's session down 0.05% at $785.10.
Related Link: Tesla Analysts Say Texas Shift 'Strategic Move,' Capacity Expansion Plans Increasingly Ambitious After Shareholder Meeting
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