Tesla, led by Elon Musk, is reportedly in discussions with the Indian government to establish a factory with an annual capacity to produce approximately 500,000 electric vehicles (EVs).
If the plans materialize, Tesla’s arrival in India could have a significant impact on the government’s “Make in India” initiative. The country has become an attractive manufacturing hub for global companies seeking to diversify their production bases beyond China. India also offers a large auto market, currently ranked as the world’s fourth-largest after China, the United States, and Japan, with sales of approximately 3.9 million units last year.
The starting price for Tesla’s vehicles in India is expected to be around 2 million rupees ($24,400.66), which is more than double the price of India’s cheapest EV, the MG Comet, and half a million rupees higher than the Tata Nexon EV, the top-selling electric car in the country.
Tesla’s previous attempts to enter the Indian market faced challenges, including the government’s refusal to lower import taxes on its cars, which can reach up to 100% for electric vehicles. The Indian government insisted on local production, while Tesla wanted to initially export its cars to gauge demand.
However, recent developments suggest a renewed effort by Tesla to establish a presence in India. Elon Musk met with Prime Minister Narendra Modi during the latter’s visit to the United States last month, where Musk expressed his admiration for Modi and his interest in investing in India. Musk stated that Tesla intends to make significant investments in India and is working to determine the right timing for its entry into the market.
The ongoing discussions between Tesla and the Indian government involve incentives and opportunities for local manufacturing and exports. Tesla also sees India as a potential export base to ship cars to countries in the Indo-Pacific region.
The Ministry of Commerce and Industry is leading the talks and aims to negotiate a favorable deal that encourages both local production and exports. Sources indicate that Tesla has presented an ambitious plan, and there is optimism that the discussions will lead to positive outcomes.
While no specific timeline has been provided, the potential arrival of Tesla in India could mark a significant milestone for the country’s electric vehicle industry and contribute to its growing prominence in the global automotive market.
