Capital crsis? Tesla's investment in India uncertain amidst communication halt
What's the story
Tesla, led by Elon Musk, has reportedly ceased communication with Indian officials, casting a shadow over the country's hopes for an investment from the electric carmaker.
This information comes from Bloomberg's anonymous sources, who claim that no further inquiries have been made by Musk's team since his postponed visit to India in late April.
The halt coincides with Tesla's reported capital issues and a decision not to commit fresh investment into India in the near future.
Market dynamics
Tesla's global challenges and India's EV market
Tesla is facing a second consecutive drop in its quarterly deliveries globally, amidst increased competition in China.
Musk announced major staff reductions at Tesla in April, and the production of the company's first new model in years, the Cybertruck, has been slow.
Meanwhile, India's electric vehicle (EV) market remains lackluster with battery-powered cars accounting for just 1.3% of total car sales last year, according to BloombergNEF data.
Policy impact
India's EV policy and domestic automakers
Despite Musk's decision to postpone his visit, Indian officials have stated that Tesla is welcome to avail itself of the new import tax policy.
This policy, announced just weeks after Musk's planned visit, lowers import taxes on EVs from foreign carmakers that invest at least $500 million and start local production within three years.
Meanwhile, the Indian government is hoping that domestic automakers like Tata Motors and Mahindra & Mahindra will boost EV production and adoption in the country.