Just as Tesla gears up for its long-awaited debut in India, the company’s country head, Prashanth Menon, has resigned, Bloomberg reports. Menon’s exit comes at a pivotal moment, with Tesla finalising plans to launch retail outlets in the country’s biggest cities, including Mumbai and Delhi.
Bloomberg says the company’s operations in India will now be overseen by Tesla’s Chinese team, a move that could raise eyebrows in Indian circles. No immediate Indian leadership replacement has been named.
Menon, who served as chairman of Tesla India and led operations in the country for over four years, played a key role in laying the foundation for Tesla’s entry into India, the world’s third-largest auto market.
From setting up the local office in Pune in 2021 to securing showroom leases this year, Menon was seen as the face of the electric vehicle giant’s push into India.
His resignation was confirmed by multiple sources, according to Bloomberg.
So why is Menon stepping down? It’s for personal reasons that have not been disclosed. Tesla did not respond to requests for comment, the report said.
Menon’s departure comes at a crucial time, as India and the United States negotiate a bilateral trade deal that could reduce the country’s massive import duties on vehicles. Menon has worked for Tesla in various capacities for nearly nine years.
India’s current import tax – ranging as high as 110 per cent on foreign cars – has been a major stumbling block for Tesla, which has long advocated for much lower tariffs.
The UK-India Free Trade Agreement announced Monday, could offer insight into the shape of the US-India deal. Under the UK deal, India will reduce the tariff on cars imported to just 10 per cent under a defined quota system.
Tesla’s sales are expected to kick off in Mumbai, Delhi, and Bangalore by the third quarter, with plans to ship several thousand cars to India by year-end.
The models that Tesla brings to India – and where they come from – could depend heavily on the outcome of the India-US trade talks.
Tesla and other foreign carmakers are hoping the talks will increase the cap on EV imports under concessional tariffs from just 8,000 to as many as 50,000 vehicles. This would make it easier for Tesla to ramp up its operations and bring more affordable models to India, where demand for premium cars is on the rise.
India’s growing upper-middle class presents an attractive market for Tesla’s high-end electric cars, although it could put pressure on local automakers.
Tesla's entry into India has been delayed for years due to high import duties and the Indian government's insistence on local manufacturing. Negotiations stalled as Tesla sought tax breaks to test the market with imports first, while India pushed for a commitment to set up a local factory.
A successful entry into India could help Tesla regain momentum after a rough year in other markets, particularly Europe, where sales have plunged. Elon Musk’s far right-wing politics have sparked a backlash and protests. In the UK, Tesla’s sales dropped 62 per cent in April, and in France, they slid 59 per cent. Sales have also fallen in the US.
However, not all of the decline in sales is due to Musk’s politics. Stiffer competition from other automakers –particularly China’s BYD, which is expected to overtake Tesla as the world’s largest EV maker this year – has also played a role.
Musk is reported to have retained control over global “priorities”, meaning that any decisions about Tesla’s India rollout are expected to come from him and his top team.
Although Tesla’s India operation is expected to be import-only for now, the company has hinted at the possibility of local manufacturing down the road.
In a sign that Tesla’s India plans are moving forward, the company recently posted job openings in the country. These roles included positions for showroom staff and order managers.