Tesla’s troubles and Musk’s delayed tryst with India

Abhijit Bhattacharyya

Author and Columnist

ELECTRIC carmaker Tesla’s boss Elon Musk put off his visit to India at the eleventh hour due to ‘very heavy obligations’. He was expected to be in the country on April 21-22 and scheduled to meet Prime Minister Narendra Modi. However, he wrote on X (formerly Twitter) that he was looking forward to coming to India later this year. The New Delhi trip would have been very interesting, considering that India is in the middle of parliamentary elections.

His regret at not being able to visit India now reeks of despair and desperation. Investment, production and an entry into a market of crores of consumers, helped by ‘duty-concession’ import and sale of vehicles is undoubtedly attractive for the high-profile tech billionaire.

Musk’s delayed ‘Mission Delhi’ holds promise because foreign direct investment, quality import and indigenous production for industrial development are always welcome for India. Yet, there are questions regarding on how strong a wicket he is on his home turf to be ready for his India venture?

Undoubtedly, the high-tech Tesla electric vehicle (EV) has done well since its entry into the world market. But today, strong headwinds have already made the Tesla drive extremely tricky. First, hasn’t the cheaper Chinese EV (notwithstanding its dubious quality) eclipsed Musk’s automobile? Secondly, with the EV demand witnessing a slump in the West, which is Musk’s own backyard, can Tesla’s downswing this year — after the boom in 2022 and 2023 — be stalled?

That’s not all. Virtually overnight, Musk laid off 14,000 staff members, constituting 10 per cent of the global automobile workforce of 140,000, through a laconic message. Even more shocking was the appeal of Musk to seek ‘the judge-voided’ 2018 pay. He provoked his critics further, justifying the en masse sacking “to prepare the firm for the next phase of growth” and urging shareholders of his company to approve for him the record-breaking $56-billion pay fixed in 2018 but rejected in January this year by Judge Kathaleen McCormick of the Delaware Court of Chancery, terming the Tesla Board-granted compensation to its CEO “an unfathomable sum” that is unfair to shareholders. That certainly resulted in the tech adventurer losing goodwill even among his shareholding peers.

No doubt, Musk is the epitome of US capitalism and laissez-faire, and the maker of landmark tech companies of the 21st century, unlike the defence and aviation corporations, the offshoots of 20th-century World Wars. With the onset of globalisation and privatisation to create wealth and avoid wars of total destruction by entangling all major economies, the world did change radically. But, it also opened another disproportionate front in the form of successful billionaires like Musk (net worth, $174 billion), Mark Zuckerberg ($175 billion), Bernard Arnault ($221 billion), Jeff Bezos ($203 billion) and Bill Gates ($149 billion).

An individual with such ‘nuclear-powered’ monetary muscle can any day, any time, any place make or break institutions of any Third World nation if he choses to do so from a remote location and finds his business interests being incompatible with any investment or industry-seeking Global South capital. Thus, in his own country, Musk has openly spoken against regulators and instantly shifted the site of incorporation of his rocket company SpaceX to Texas and brain-chip start-up Neuralink to Nevada, both from Delaware.

The message is loud and clear: any profit-making Western company whose owner’s net worth is over $150 billion, will regard state-made laws as ‘irritants’ as the world over, multi-billionaires don’t like taking ‘no’ for an answer for ‘development and expansion’ of their business and profit. Indian history shows how the dogged English traders hung around successive emperors to ultimately have their way on initiating lucrative trade to build the ‘Empire of the East’ and later of the world. Even today, one sees several Western samples of ‘hostile takeover’ of small fish by the big ones.

Regarding Tesla, it has gone in for a hiring freeze after ending the discount on its inventory across EVs, even when the sales flagged. In Musk’s words: “It’s become complex and inefficient.” Interestingly, the self-declared ‘free speech absolutist’ not too long ago had complained that India’s EV car import duty was the “highest in the world”. Today, that highest rate of 100 per cent is down to 15 per cent. Musk must be missing India now.

Musk’s troubles back home are mounting. Tesla has cut prices both in the US and Chinese markets. His biggest booster, top bull Adam Jonas of Morgan Stanley, asks: “Is it time to sleep on the floor again (at Tesla)?” And, Musk’s SpaceX is working with Northrop Grumman on the multi-billion-dollar ‘US spy satellite system’. The writing is on the wall (or rather, the road) for Tesla as new vistas open up in the sky.

Coming back to the Indian market, the Tesla EV’s price is far from competitive. It starts from $39,000 (around Rs 35 lakh) apiece. In India, any car priced more than Rs 20 lakh has a 5 per cent market. Obviously, Tesla is being overrun by Beijing’s $10,000 BYD (Build Your Dreams) EV. Secondly, the environmental impact of EV battery production and disposal appears to be enormously damaging. The Government of India says that the auto industry’s contribution to the GDP rose to 7.1 per cent in 2023 from 2.77 per cent in 1992-93. Today, 2 crore people are directly or indirectly employed in this industry. Hope the EV fast-tracking doesn’t take away jobs of millions overnight in India. In the early 20th century, Vladimir Lenin said: “Imperialism, the highest stage of capitalism.” Pray, the reverse doesn’t happen to 21st-century India — Capitalism, the highest stage of imperialism.

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