"Musk to Announce India Investment Plan This Month"... Will It Be a Breakthrough for Tesla's Slump?

Elon Musk, CEO of Tesla, is reported by major foreign media on the 10th (local time) to meet Indian Prime Minister Narendra Modi this month to announce local investment plans. On the same day, Wall Street downgraded both Tesla's sales forecast and target stock price for this year. Attention is focused on whether Tesla can find a breakthrough for its poor performance through entry into the Indian market.

According to sources cited by major foreign media, CEO Musk is scheduled to meet Prime Minister Modi in New Delhi, India, in the fourth week of this month and then announce investment plans for India. The Prime Minister's Office and Tesla did not respond to requests for comments.

[Image source=Yonhap News]

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The timing of Musk's visit coincides with the Indian general election. Tesla's investment announcement during the election period is expected to strengthen Modi's pro-business image, who has been promoting job creation by establishing manufacturing plants in India and attracting foreign companies for years, and to support his economic policies. Foreign media are predicting Modi's third term.

Earlier, during a visit to the U.S. in June last year, Prime Minister Modi met with CEO Musk and urged investment in India. Musk reportedly responded by saying, "We need to build a factory in India as soon as possible." Subsequently, the Indian government announced a significant reduction in import tariffs from the previous 70-100% to 15% for electric vehicle companies investing more than 41.5 billion rupees (approximately 670 billion KRW) and starting production within three years.

Earlier this month, foreign media reported that Tesla is scouting for a site for an electric vehicle factory in India worth between $2 billion and $3 billion (approximately 2.73 trillion to 4.1 trillion KRW). CEO Musk said on X (formerly Twitter) the day before, "Just as every other country has electric vehicles, India should have electric vehicles too," adding, "Supplying Tesla electric vehicles to India is a natural step."

There is also growing interest in whether Tesla's entry into the Indian market can serve as a breakthrough for its recent poor performance. Due to a slowdown in electric vehicle demand and price competition from Chinese models, Tesla's electric vehicle deliveries in the first quarter of this year decreased for the first time in four years. On this day, Wall Street's downward revisions of Tesla's target stock price and forecasts of decreased sales this year negatively affected the stock price.

According to Bloomberg News, Alexander Potter, an analyst at investment firm Piper Sandler, predicted that Tesla's annual deliveries this year will decrease by 0.5% from last year's 1,808,581 units, breaking the 1.8 million mark. Jeffrey's analyst Philip Houshough forecasted a larger 3% decrease. They set Tesla's target stock prices at $205 and $165, respectively.

Meanwhile, Tesla's stock price on the New York Stock Exchange closed at $171.76, down 2.89% from the previous session. After the robo-taxi unveiling schedule was announced on the 5th, the stock rose about 7.3% over two regular trading days, but it appears insufficient to overcome the poor performance. The stock has fallen about 30% since the beginning of this year.

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