Tesla’s India plans won’t include electric vehicle manufacturing, according to the local minister of industries, and the reason is quite simple.

Tesla has been trying to enter the Indian automotive market for years, but it has been unable to circumvent the country’s protectionist efforts, which include high import duties on foreign vehicles.

There have been several false starts in the country. CEO Elon Musk has stated on several occasions that Tesla is actively trying to enter the market.

For the last five years, it seemed that the American automaker was on the verge of entering the Indian market with local hires and even vehicle validation, but it never materialized.

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Over the past few months, a new initiative has been underway, and it has shown promise.

It came after India finally reached a compromise on its import duties on cars last year, opening the door for Tesla and other EV automakers to launch in the country.

The deal involves significantly reducing import duties for a limited number of electric vehicles, provided the automaker makes a substantial investment and commitment to establish an electric vehicle factory in India within the coming years.

Since then, Tesla has started hiring service and sales staff, and there have been several reports that the automaker is closing in on some retail and service locations.

However, we now learn that Tesla doesn’t plan to take advantage of the deal, which includes establishing local vehicle manufacturing.

HD Kumaraswamy, India’s Ministry of Heavy Industries, announced that Tesla won’t be one of the automakers planning to build EV factories in the country (via BBC):

“Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest [in manufacturing electric cars in India]. Tesla – we are not expecting from them.”

Another Indian government official added that while Tesla participated in the first round of discussions with stakeholders, it stopped participating in the process after, while the previously mentioned automakers continued.

Kumaraswamy still said that he believes Tesla plans to open “two showrooms” in the country, but it’s not clear how it plans to handle the situation with the import duties.

Tesla also faced another recent setback in India when it lost its head of the country last month.

Electrek’s Take

I said it several times in the last few months amid Tesla’s latest effort to enter India, but I’ll repeat it: I’ll believe it when I see it.

We have been burned too many times on this.

Showrooms are one thing, but Tesla also needs to deploy service and charging stations. If its vehicles are still subject to steep import duties without the benefits of the promise of a manufacturing investment, it’s going to be a tough market for Tesla.

The primary reason Tesla is not committing to a manufacturing facility in India is likely due to its factories currently operating at approximately 60% capacity.

It makes no sense to invest in more manufacturing capacity if you are not already utilizing your current fully deployed capacity. That’s also why Tesla halted its Gigafactory Mexico project, along with the US tariffs.

Tesla currently has a demand problem. Not a production capacity demand.

A leaked recording of a new Tesla training program reveals that the company is concerned about a growing employee morale issue.

Last year, we noted that, following a mass wave of layoffs that was poorly handled on many levels, Tesla has been facing significant employee morale issues.

A year later, it looks like these are ongoing and Tesla is trying to address them.

Last week, Tesla had a week-long production shutdown at Gigafactory Texas and employees were offered to come in for some training during that time.

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One of the training sessions was related to “company culture,” and Business Insider obtained a recording, releasing some quotes from it.

The instructor asked Tesla employees attending the training if they’d ever felt “I can’t work under these conditions”or had felt set back by constant change at the company.” “I know I have,” the instructor told the employees.

The recording made it clear that Tesla is having some turnover issues due to morale. The instructor said:

“A lot of people leave this company, and they have kind of a negative taste in their mouth. They think: ‘Man, it was terrible. It was bad. I got burnt out. I feel like I didn’t get anything done, nobody listened to me.’”

The company culture training reportedly used to be for Tesla management, but the instructor said that the company decided to expand it to all employees.

They added:

“Leadership has kind of another level of responsibility for trying to guide and direct that culture. But at the end of the day, it’s us as the people on the ground that are the reflection of the culture.”

The instructor highlighted the need for employees to focus on Tesla’s “higher purpose.”

Tesla greatly benefited from being a mission-driven company with the aim. of accelerating the transition to electric transport and sustainable energy.

It helped with hiring and in pushing Tesla’s well-known aggressive work rate.

However, Tesla’s mission shifted in the last few years as CEO Elon Musk had Tesla focus on autonomous driving, and many people feel that the original mission has taken a step back with the CEO backing Donald Trump and the Republican party, who have historically campaigned against electric vehicles and renewable energy.

Electrek’s Take

Company culture begins at the top and flows down. Musk has historically asked a lot out of Tesla employees, but he has barely been working at Tesla for the past year.

That’s not outstanding leadership.

Furthermore, he alienated most of Tesla’s customer base, and while he still has loyalists at Tesla, I think that his massive drop in favorability is also reflected among Tesla employees.

I think talent retention should be one of the biggest concerns at Tesla right now.

I track employee comings and goings closely and I see a continued exodus of talent right now that doesn’t seem to be slowing down. Employee morale is part of it.