{"id":127568,"date":"2022-05-30T09:23:01","date_gmt":"2022-05-30T09:23:01","guid":{"rendered":"https:\/\/fin2me.com\/?p=127568"},"modified":"2022-05-30T09:23:01","modified_gmt":"2022-05-30T09:23:01","slug":"elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/","title":{"rendered":"Elon Musk’s troubled tryst with India: Tesla, Starlink in limbo for over a year"},"content":{"rendered":"

Musk is planning a whistle-stop tour to India in November; he’s exploring opportunities elsewhere in Asia; he may be pulling out altogether.<\/strong><\/p>\n

Surajeet Das Gupta reports.<\/strong><\/p>\n

<\/p>\n

Recently, world headlines buzzed with Elon Musk’s announcement that he was shelving his audacious bid for social media platform Twitter.<\/p>\n

Away from the media spotlight, questions are being asked about the maverick billionaire’s plans in India, too.<\/p>\n

A few days ago, a Reuters report said Musk’s flagship Tesla had put on hold its plan to launch electric cars in India.<\/p>\n

Tesla has abandoned its search for showroom space, reassigned its small India team around the globe and set itself a deadline next year of February 1, when the Union Budget is usually announced, to check whether its demand for a sharp duty reduction in imported electric vehicles (EVs) is accepted (the prognosis: highly unlikely).<\/p>\n

Starlink, Musk’s satellite broadband service, is also struggling.<\/p>\n

After initial aggressive moves, soliciting subscriptions at a steep $99 per customer, it turns out that Starlink has not yet applied for a Global Mobile Personal Communication by Satellite (GMPCS) licence, despite saying it would do so by January 31.<\/p>\n

Sunil Mittal’s Bharti, Reliance Jio and the Tata group are competitors in this space, and Bharti has already won the first-mover advantage by acquiring a GMPCS licence.<\/p>\n

<\/p>\n

Starlink set base in India in November last year but has suffered serial setbacks, principally because it had little understanding of the rules of the game in India.<\/p>\n

This much was clear after its head of Indian operations, Sanjay Bhargava, a colleague of Musk in PayPal, quit after four months citing “personal reasons”.<\/p>\n

A few days before that, the Department of Telecommunications (DoT) had pulled up the company for violating Indian laws by accepting pre-bookings for its broadband service from customers without obtaining a licence.<\/p>\n

Starlink was forced to return subscriptions to over 5,000 customers.<\/p>\n

Musk’s stoic silence — a contrast to his noisy comments during Tesla’s initial India entry bid — has added to the drama.<\/p>\n

Inevitably, as with all things Musk, there’s been a storm of speculation.<\/p>\n

Musk is planning a whistle-stop tour to India in November; he’s exploring opportunities elsewhere in Asia; he may be pulling out altogether.<\/p>\n

<\/p>\n

Recently, Tesla’s senior leadership reportedly met the Indonesian president to explore investment opportunities in EVs.<\/p>\n

Asked whether Tesla was shelving EV plans in India, Prashanth R Menon, Tesla’s director-India since March 21, did not respond.<\/p>\n

Menon continues in his role but other key officials are moving or have been given additional roles.<\/p>\n

Manuj Khurana, who oversees key policy and business development in India, has now been asked to also handle product management in Fremont, USA.<\/p>\n

Nishant Nishant, a former Ather Energy executive, who joined Tesla as its regional lead on EV charging infrastructure has become operations lead for Asia-Pacific, though based in India.<\/p>\n

“The Indian market is very small for them, so I am certain it is not a focus area,” said the founder of a leading EV manufacturer.<\/p>\n

So, what is Tesla’s problem?<\/p>\n

Tesla wants to import completely built-up units (CBUs) from China or the US for the Indian market.<\/p>\n

<\/p>\n

Musk says Indian duties on car CBUs are the highest in the world and should be cut steeply.<\/p>\n

This is not a new demand from global auto majors.<\/p>\n

Mercedes and BMW have also lobbied for duty cuts for their internal combustion engine-powered cars earlier, but the government has not obliged.<\/p>\n

For Tesla, the duty is pegged at 100 per cent for cars with a CIF (cost, insurance and freight) value of more than $40,000 and 60 per cent for those with a CIF of less than $40,000.<\/p>\n

Tesla’s submission to the government raised two issues: It wants this duty reduced to 40 per cent and has demanded a differential custom duty structure for EVs and ICE cars.<\/p>\n

Taxing ICE and EVs at the same rate is inconsistent with government climate goals, Musk pointed out.<\/p>\n

The current steep import duty structure would mean domestic prices of Rs 60 lakh for the Tesla 3 to over Rs 1 crore for other upscale models.<\/p>\n

This price range would severely limit its market. Tesla has a point.<\/p>\n

The annual market for luxury cars (Merc, Audi, BMW) is at 20,000-35,000 units, most of them ICE-powered.<\/p>\n

<\/p>\n

But the government has agreed with the arguments of the Tatas and M&M who contend that any import duty reduction on CBUs is unfair when there is a high localisation threshold for Indian automakers.<\/p>\n

Accordingly, Road Transport and Highways Minister Nitin Gadkari has asked Tesla to first assemble the vehicles in India.<\/p>\n

He also has reasoned that Tesla can export from the country, too.<\/p>\n

Global automakers, who compete with Tesla, are already doing so to make their products affordable.<\/p>\n

Of course, they have the advantage of having their own factories.<\/p>\n

Mercedes-Benz, for instance, has already announced that it will set up local assembly (CKD or completely knocked-down operations) for its EV car by the end of this year, becoming the first luxury maker to do so.<\/p>\n

Audi, the luxury brand from Volkswagen, has also stated that it is evaluating setting up an assembly plant.<\/p>\n

Hyundai, which launched the Kona Electric, is also assembling in India. So why can’t Tesla?<\/p>\n

“They have received the wrong advice on India.<\/p>\n

“If they are serious, they should set up or buy an assembly line and go for CKD operations that attract lower duty.<\/p>\n

“The Ford factory is available, for instance, and it would not cost them more than $100 million.<\/p>\n

“That way, their models will have lower prices and they will get reasonable volumes,” said an advisor to major automakers in India.<\/p>\n

<\/p>\n

He pointed out that for value addition in India, they can easily manufacture the seats, tyres and wheels, glass and the internal fit and finishing.<\/p>\n

“India has a vibrant component industry that is supplying globally even to Tesla, so there is no issue for them at all.”<\/p>\n

The Indian outfit could also export auto components, which Tesla sources from India, such as the differential gear.<\/p>\n

In satellite broadband, Starlink’s strategy has been to replicate the US model and sell the service to individual customers.<\/p>\n

But with a price tag of $99 a month and installation charges of Rs 40,000, that’s too steep to gain a critical mass of customers in India.<\/p>\n

Starlink has started shifting focus to concentrate on the B2B market.<\/p>\n

For instance, it wants to provide satellite backhaul to enable telcos to meet rural connectivity targets and collaborate with the government by connecting schools, police stations, courts and remote locations.<\/p>\n

Competitors believe that Starlink cannot ignore India because it is a key market in the satellite broadband sweepstakes.<\/p>\n

But it has to figure out whether it will team up with an Indian partner or offer the services on its own.<\/p>\n

It also needs a team in place after Bhargava’s departure.<\/p>\n

And Musk clearly needs to take a relook at his overall India plan.<\/p>\n

Tesla<\/span><\/strong><\/p>\n

Plan to launch electric cars in India on hold<\/span><\/p>\n

Has abandoned its search for showroom space<\/span><\/p>\n

Reassigned its small India team around the globe<\/span><\/p>\n

Set itself a deadline  of February 1, 2023 to see if its demand for a sharp duty reduction in imported EVs is accepted<\/span><\/p>\n

Starlink<\/span><\/strong><\/p>\n

Charged customers $99 a month plus installation charges of Rs 40,000<\/span><\/p>\n

Head of Indian operations quit after four months<\/span><\/p>\n

DoT pulled up the company for violating Indian laws by accepting pre-bookings without obtaining a licence<\/span><\/p>\n

Starlink was forced to return subscriptions to over 5,000 customers<\/span><\/p>\n

Is still to apply for a licence<\/span><\/p>\n

Now shifting focus to the B2B market<\/span><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Musk is planning a whistle-stop tour to India in November; he’s exploring opportunities elsewhere in Asia; he may be pulling out altogether. Surajeet Das Gupta […]<\/p>\n","protected":false},"author":3,"featured_media":127567,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"\nElon Musk's troubled tryst with India: Tesla, Starlink in limbo for over a year - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Elon Musk's troubled tryst with India: Tesla, Starlink in limbo for over a year - Fin2me\" \/>\n<meta property=\"og:description\" content=\"Musk is planning a whistle-stop tour to India in November; he’s exploring opportunities elsewhere in Asia; he may be pulling out altogether. Surajeet Das Gupta [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2022-05-30T09:23:01+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2022\/05\/Elon-Musks-troubled-tryst-with-India-Tesla-Starlink-in-limbo-for-over-a-year.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/\",\"url\":\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/\",\"name\":\"Elon Musk's troubled tryst with India: Tesla, Starlink in limbo for over a year - Fin2me\",\"isPartOf\":{\"@id\":\"https:\/\/fin2me.com\/#website\"},\"datePublished\":\"2022-05-30T09:23:01+00:00\",\"dateModified\":\"2022-05-30T09:23:01+00:00\",\"author\":{\"@id\":\"https:\/\/fin2me.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\"},\"breadcrumb\":{\"@id\":\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/fin2me.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Business\",\"item\":\"https:\/\/fin2me.com\/category\/business\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Elon Musk’s troubled tryst with India: Tesla, Starlink in limbo for over a year\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/fin2me.com\/#website\",\"url\":\"https:\/\/fin2me.com\/\",\"name\":\"Fin2me\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/fin2me.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/fin2me.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\",\"name\":\"Mark\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fin2me.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/39b72719fb75a2d3c7d7695026648602?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/39b72719fb75a2d3c7d7695026648602?s=96&d=mm&r=g\",\"caption\":\"Mark\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Elon Musk's troubled tryst with India: Tesla, Starlink in limbo for over a year - Fin2me","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/","og_locale":"en_US","og_type":"article","og_title":"Elon Musk's troubled tryst with India: Tesla, Starlink in limbo for over a year - Fin2me","og_description":"Musk is planning a whistle-stop tour to India in November; he’s exploring opportunities elsewhere in Asia; he may be pulling out altogether. Surajeet Das Gupta [...]","og_url":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/","og_site_name":"Fin2me","article_published_time":"2022-05-30T09:23:01+00:00","author":"Mark","twitter_card":"summary_large_image","twitter_image":"https:\/\/fin2me.com\/wp-content\/uploads\/2022\/05\/Elon-Musks-troubled-tryst-with-India-Tesla-Starlink-in-limbo-for-over-a-year.jpg","twitter_misc":{"Written by":"Mark","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/","url":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/","name":"Elon Musk's troubled tryst with India: Tesla, Starlink in limbo for over a year - Fin2me","isPartOf":{"@id":"https:\/\/fin2me.com\/#website"},"datePublished":"2022-05-30T09:23:01+00:00","dateModified":"2022-05-30T09:23:01+00:00","author":{"@id":"https:\/\/fin2me.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a"},"breadcrumb":{"@id":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/fin2me.com\/business\/elon-musks-troubled-tryst-with-india-tesla-starlink-in-limbo-for-over-a-year\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/fin2me.com\/"},{"@type":"ListItem","position":2,"name":"Business","item":"https:\/\/fin2me.com\/category\/business\/"},{"@type":"ListItem","position":3,"name":"Elon Musk’s troubled tryst with India: Tesla, Starlink in limbo for over a year"}]},{"@type":"WebSite","@id":"https:\/\/fin2me.com\/#website","url":"https:\/\/fin2me.com\/","name":"Fin2me","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/fin2me.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/fin2me.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a","name":"Mark","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fin2me.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/39b72719fb75a2d3c7d7695026648602?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/39b72719fb75a2d3c7d7695026648602?s=96&d=mm&r=g","caption":"Mark"}}]}},"_links":{"self":[{"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/posts\/127568"}],"collection":[{"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/comments?post=127568"}],"version-history":[{"count":0,"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/posts\/127568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/media\/127567"}],"wp:attachment":[{"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/media?parent=127568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/categories?post=127568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fin2me.com\/wp-json\/wp\/v2\/tags?post=127568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}