Tesla is not expected to invest in India anytime soon as a new report states that Elon Musk’s team is ghosting Indian officials about the project.

Tesla has been trying to get into the Indian automotive market for years, but it wasn’t able to find a way around the country’s protectionist effort, which includes high import duties on vehicles being imported.

The Indian government wanted Tesla to build a factory in the country, but the automaker preferred to first establish a market in the country through imported vehicles before investing in a manufacturing facility in the country.

Earlier this year, we reported that India finally came up with a compromise on its import duties on cars to open the door for Tesla and other EV automakers to launch in the country.

The deal involves greatly reducing import duties for a limited number of electric vehicles as long as the automaker makes a significant investment and commitment to build an electric vehicle factory in India in the coming years.

It looked like Tesla had a hand in making that deal happen considering the automaker was working closely with the government, and there were indications that Tesla was going to take them up on the deal.

CEO Elon Musk planned to go to India shortly after the deal was announced – hinting at closing a deal for Tesla to launch in the market and building a factory there.

However, the CEO canceled his trip to India at the last minute.

Now, Bloomberg reports that Indian officials do not expect Tesla to take them up on the new program and invest in the country anytime soon, as Musk’s team has reportedly stopped communicating with Indian officials:

Musk’s team hasn’t made any further inquiries with officials in New Delhi after the billionaire postponed a visit to India in late April, the people said, asking not to be identified because they’re not authorized to speak publicly. The government is given to understand that Tesla has capital issues and doesn’t plan on pledging fresh investment into India in the near future, they said.

This cooling on Tesla’s potential investment in India comes after the automaker confirmed two quarters in a row of year-over-year decline in deliveries.

Electrek’s Take

If this report is true, it could be as simple as Tesla seeing issues with its automotive business over the last few quarters and believing that the timing is not right for an Indian expansion, especially under the country’s restrictive conditions.

However, I’d also note that shortly after Elon canceled his trip to India, he ended up going to China instead.

China has become Tesla’s main manufacturing hub, and it’s possible that they had a hand in that decision