North Florida business magnate, Elon Musk, has recently announced the postponement of his much-awaited visit to India. The visit, which was to include a high-profile meeting with India’s Prime Minister, Narendra Modi, has been put on hold due to what Musk described as ‘pressing issues’ at Tesla Inc.
Musk expressed his disappointment via a social media post, citing “very heavy Tesla obligations” as the reason behind his decision. He, however, assured his followers of his intention to make the visit later in the year.
Musk’s Busy Week at Tesla
News of the postponement comes on the heels of a hectic week at Tesla. In a memo to the company’s over 140,000 employees, Musk announced that he would be reducing the workforce by more than 10% globally. The company also witnessed the departure of two top executives.
Further adding to the company’s challenges, Tesla announced on Wednesday its plan to request shareholders to vote again on a $56 billion compensation package for Musk. This move comes after a Delaware court voided the initial package in January.
On Friday, Tesla recalled almost 3,900 Cybertruck pickups and reduced the price of most of its cars in the US by $2,000. This decision was made in response to slowing sales and increasing inventories.
The company is set to report its first-quarter earnings on April 23, following a report of vehicle deliveries that missed estimates by a significant margin. Tesla’s stock has also taken a hit this year, falling by more than 40% and dropping the automaker’s market value to less than $470 billion.
Significance of Musk’s Planned Visit to India
From a political standpoint, the timing of Musk’s planned visit to India couldn’t have been more critical for both him and Prime Minister Modi. As India kicks off voting for its national elections, Modi is seeking a third term, banking on the nation’s economic rise. Investments from billionaires like Musk would have certainly boosted his appeal among voters.
From a business perspective, Musk is seeking permission for SpaceX’s Starlink to operate in India, which is projected to be its biggest market. Assurances have already been received from the Indian government that Starlink will be able to start operations in the country by the third quarter of this year.
Tesla has been trying to penetrate the Indian market for years, but high import taxes have been a deterrent. However, last month, India lowered import taxes on EVs from foreign carmakers that pledge to invest at least 41.5 billion rupees ($497 million) and start EV production from a local factory within three years.
A substantial investment by Tesla could enable Musk to tap into India’s burgeoning electric-vehicle market and counter slowing demand for EVs in other markets. However, many are waiting to see on-ground action, given the delays experienced with previously announced projects, such as constructing a massive plant in Mexico.
