Editorial: We Musk not make haste

Like the cars Tesla makes, Elon Musk’s decisions are electric. It was entirely in character that he should postpone his visit to India to meet Prime Minister Narendra Modi just 24 hours ahead of the appointment. The decision was disclosed sotto voce on Twitter (now called X), just as he had announced, without preamble, the visit 10 days earlier.

Another trait of Musk, which he shares with Modi, is his wont never to explain himself, or to keep it patently specious if forced to. He cited “very heavy Tesla obligations” as the reason for pulling out of the meeting with the Indian Prime Minister. As an excuse, this was flimsy even for him. The heavy obligations include the Tesla quarterly earnings call coming up on Tuesday that had already been scheduled when he announced the visit to India. Also, the conference with stock analysts could very well be held online.

Thin ruses lead to speculation and Musk’s pullout will surely trigger questions whether the advice he received on the current Indian election, the first phase of which took place last Friday, was to hedge his bets. Has he been told that a BJP victory is not a foregone conclusion as Team Modi has been telling him? The Indian opposition certainly thinks so.

However, neither Musk nor Modi are men of circumspection and are hardly likely to have realised, even a bit late, that a major investment decision on Tesla making its cars in India and a major policy relaxation by India to enable him to do so ought rightly to wait upon the people’s mandate. No sense of political propriety has ever stopped this PM from helping himself to a photo op in the thick of an election season. Only a major impasse over the investments Musk is proposing to bring and the conditionalities he is willing to agree to could have made the PM’s team spurn such an opportunity.

Musk’s withdrawal likely has been forced by two scenarios. One concerns the sequence of bad news Tesla has been having lately. Demand for its EVs has slumped badly in the face of stiff competition in China and Europe, due to which the company’s market worth has dropped by 700 billion dollars from the peak. Since announcing the Musk visit to India, Tesla has carried out its largest round of layoffs, dropped plans to build an affordable EV model, and slashed prices in the Chinese market. Questions at the earnings call Tuesday are likely to be hostile and a high-profile meeting with Modi and the announcement of a 2-3 bn dollar investment in India’s emerging EV market would have helped to assuage the analysts a bit. But the India plan seems to have suddenly gone awry. Signs of this were visible last week when a Tesla senior executive handling the India project suddenly resigned.

The other hiatus between the Indian side and Tesla relates to the Starlink satellite internet investment which, due to its geopolitical security dimensions, is of far greater import to India than the EV project. The long-planned Starlink proposal is dependent on Musk agreeing to submit to India’s regulatory framework and the conditionality that it must have a share of local investment as well. Such conditions are not to the liking of Musk, and his decision to pull out of Sunday’s visit is a sign that New Delhi is driving a hard bargain. If indeed India is standing its ground to secure the country’s interest, rather than a crony capitalist’s, it is wise to put off a decision until after the people have had a say.