Tesla's Indian factory seems to have a bleak outlook. The latest report states that Tesla executives have stopped contacting the Indian side.

According to insiders, after Musk postponed his visit to India at the end of April this year, his team has not yet made further inquiries to officials in New Delhi. In April of this year, Musk cancelled his scheduled trip to India due to urgent internal issues, which included a meeting with Indian Prime Minister Narendra Modi.

Insiders also revealed that the Indian government is aware of Tesla's funding issues and does not intend to commit new investments to India in the near future.

As early as 2021, Tesla had attempted to enter the Indian market, when the company was committed to pushing the Indian government to reduce the import tax on electric vehicles by 100%, but unexpectedly encountered a wall. In 2022, negotiations between Tesla and the Indian government broke down again as Indian officials demanded that Tesla commit to building factories locally to produce electric vehicles.

By 2023, Tesla has finally relaxed its stance on building a factory. The company was subsequently rumored multiple times to plan to increase investment and open factories in India.

It is understood that Tesla also drew a big cake in negotiations with India. Tesla has stated plans to produce a new electric car priced at 2 million rupees (approximately $24,000) locally and may export the car to other regions with India as the production center.For Tesla's goodwill, the Indian side also reciprocated. Just a few weeks before Musk announced his visit to India in April, India announced a reduction in import taxes on electric vehicles for foreign car manufacturers.

Although Tesla and the Indian authorities are both interested in cooperating, the plan cannot keep up with the changes.

Since the beginning of this year, many things have happened both inside and outside Tesla.

Firstly, due to the slowdown in demand for electric vehicles and fierce competition in the Chinese market, Tesla's global quarterly delivery volume has experienced a year-on-year decline for two consecutive quarters. Secondly, Tesla announced significant layoffs in April this year, with a reduction of over 10%. In addition, Tesla's heavyweight model, the Cyber truck, which has been brewing for many years, has had poor production and sales, and the construction of a new factory in Mexico, originally planned to produce the Cyber truck, has also been postponed.

These things seem to have gradually diminished Tesla's interest in the Indian market.

For Tesla, betting on India is a bold but risky move. At present, the electric vehicle market in India is still in its early stages. India surpassed Japan to become the world's third-largest automotive market in early 2023, but by the end of 2023, domestic electric vehicles accounted for less than 2% of total car sales in the country. This is both an advantage and a disadvantage for India, as building factories also requires consideration of issues such as the automotive component supply chain.

According to insiders, the Indian government is now hoping to rely on domestic car manufacturers such as Tata Motors Ltd. and Mahindra&Mahindra Ltd. to increase production of electric vehicles. Insiders added that if Musk decides to rejoin, Tesla will still be welcomed and can enjoy new import tax policies.