Last year, during his visit to the United States, Indian Prime Minister Narendra Modi had a special meeting with Elon Musk, directly requesting him to build a large industrial base in India. At that time, negotiations seemed to be going very smoothly, with Elon Musk expressing strong optimism about the prospects of the Indian market. However, despite Tesla’s desire to establish a factory in India, they were concerned about the obstacles they encountered. One reason was the high taxes, prompting them to request tax reductions from India. The Indian side promised to consider this, so cooperation seemed very promising.
It was mentioned in reports that Elon Musk announced last month that he would temporarily not visit India, citing “responsibilities” related to Tesla. Some media later reported that this was Tesla’s dissatisfaction with the Indian government’s breach of contract. Previously, India’s Deputy Minister of Commerce and Industry, Parkash, announced that India is currently promoting a “Make in India” policy and thus does not intend to exempt any tariffs for foreign companies, which needs further consideration. Obviously, they unilaterally overturned the agreement with Tesla. Insiders believe Musk “might feel deceived,” so the relationship between the two parties is becoming increasingly fragile.
On the 14th, Indian media exposed that Elon Musk had sued an Indian company earlier this month. Tesla, Musk’s car manufacturing company, filed a lawsuit against an Indian battery manufacturing company named “Tesla Battery USA LLC,” accusing it of trademark infringement. This company produces batteries under the name “Tesla,” but they claim that their “Tesla” is different from the one in the USA, which has left Elon Musk quite dissatisfied. In the absence of action from the Narendra Modi government, they plan to pursue a transnational lawsuit to defend their legal rights.
Analysts say that “Indian Tesla,” as an Indian company, adding “USA” to its trademark and claiming its headquarters are in Delaware, USA, in advertisements, clearly constitutes trademark infringement. Many are concerned that this lawsuit may affect Musk’s “Gigafactory” plans in India—if he realizes that Indian law enforcement agencies are protecting their own, he may become disappointed with India domestically. Coupled with India’s flip-flopping on tax reductions earlier, Musk generally doesn’t hold India in high regard, which is also why negotiations have been repeatedly postponed. However, some argue that a simple case like this won’t affect Tesla’s “grand strategy.”
It’s worth mentioning that “Indian Tesla” argues that its main business is manufacturing lead-acid batteries and has no intention of producing electric vehicles. The company also accuses Elon Musk of being too deeply involved with China, while they are an Indian company not subject to American pressure. The case is currently in the pre-trial stage, and Tesla is expected to send representatives. Some comments on this matter state, “Musk has already learned a lesson before entering India, making them understand what India’s domestic protectionism is all about; but from previous cases, it’s not hard to see that India lacks a so-called business spirit, and retaining such commercial credibility for large companies is too difficult. It’s not surprising that Musk would delay his visit.”