Elon Musk is not coming to India but be assured that Tesla is

Elon Musk has postponed his two-day visit to India. Originally scheduled to land in the country on April 21, the Tesla CEO was supposed to meet Prime Minister Narendra Modi on April 22, and discuss, among others, the USA-based electric vehicle (EV) manufacturer's plans to enter the world's third-largest car market.

Taking to X, Musk said that his India visit has been delayed due to 'very heavy' Tesla obligations. The carmaker is eyeing an investment of USD 2-3 billion in India to set up a manufacturing plant.

A source told India Today that although Musk's visit has been postponed, talks would continue between the government and the entities closely associated with Tesla and the company itself regarding its entry into the Indian market.

While the location of Tesla's India factory is not confirmed yet, the company is looking at the auto hubs of Maharashtra, Tamil Nadu and Gujarat. Carmakers like Maruti Suzuki, Hyundai, Tata, Mahindra, MG, Volkswagen, Skoda, Nissan, Renault, Citroen, Mercedes-Benz, BMW and Audi have a production facility in at least one of the three states.

In FY24, India overtook Japan to become the third-largest car market globally with the wholesales increasing 8.7% year-on-year (y-o-y) at 4,229,566 units. «Even as the underlying demand drivers remain supportive, the volume growth for the segment is likely to moderate to 3-6% (from an elevated base). The lower growth expectation for next year (FY25) partly stems from waning pent-up replacement demand, which supported the industry over the past couple of years,» Srikumar Krishnamurthy, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA, told India Today.

The EV market in India is still at a nascent stage with electric models making up just over 2% of the total cars sold. While the government has set an ambitious target of 30% of new car sales to come from EVs by 2030, sector analysts estimate this figure to be anywhere from 15% to 20%.

Tesla's sales took a hit in the March 2024 quarter with car deliveries declining 8.53% y-o-y at 386,810 units. One of the reasons for this is the rising threat from the Chinese auto major BYD, which posted a 13% y-o-y growth in EV sales at 300,114 units