Tesla is negotiating with Indian government to start importing vehicles and build a factory

EV enthusiasts from India have been waiting for Tesla to enter the market for a long time and they have recently been putting pressure on the company and the government to move ahead.

CEO Elon Musk now confirmed that Tesla is in discussions with the government of India to request “temporary relief on import penalties/restrictions” at least until Tesla can build a local factory.

The news follows some confusions over Tesla’s ability to even import its vehicles in India that came to light last month.

At the time, Musk expressed concerns about local regulations that force foreign retailers to source 30% of their parts locally could prevent a launch.

The commerce and industry ministry responded to Musk telling him that he was wrong, but they actually assumed that Tesla would open a factory in India in order to sell cars in the country, but like almost all markets outside the US, Tesla first planned to import vehicles.

The regulation would indeed prevent, or significantly penalize, Tesla for importing its vehicles unless it starts manufacturing in the country.

Now Musk confirmed that they are discussing with the government the possibility to find a way around that:

In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built

— Elon Musk (@elonmusk) June 14, 2017

While it should be encouraging for local EV enthusiasts, it doesn’t mean that Tesla will start importing its cars anytime soon since it’s not the first time that they have been talking to the Indian government.

Last year, India’s Transport Minister visited the company to offer up land for a factory.

At this point, Mahindra, a local auto manufacturer, is even teasing Tesla about not being in the Indian market:

Good point 🙂

— Elon Musk (@elonmusk) June 2, 2017

In order to curb the carbon emissions from its growing economy, India is exploring ways to push its entire fleet to be electric vehicles only by 2030. While the demand is especially strong for very small vehicles, the market is just so large and growing that it’s likely going to be worth it for Tesla to launch the Model S, Model X and Model 3 in India.

Now they just need to figure out a way to work with the local regulations.