Tesla is preparing to send a delegation to India to explore potential sites for establishing an electric vehicle (EV) manufacturing facility, as reported by the Financial Times, citing sources familiar with the plans of the Elon Musk-led company. The team from Tesla is expected to arrive from the US by late April to assess locations in Maharashtra, Gujarat, Tamil Nadu, and possibly Haryana, with a preference for sites near ports to facilitate exportation.
According to the report, Tesla intends to invest between $2 to $3 billion in the construction of the manufacturing plant. This decision follows India’s recent approval of a scheme allowing companies to import up to 8,000 EVs annually at a reduced tariff if they commit to establishing manufacturing operations within the country within three years. Tesla had been advocating for lower import tariffs during negotiations with the Indian government.
In another development, Tesla has commenced the production of right-hand drive vehicles for the Indian market at its Berlin facility, as per Hindustan Times. These cars are expected to be introduced on Indian roads later this year. Bloomberg previously reported that India was nearing an agreement with Tesla to import its vehicles starting from 2024, with the possibility of Tesla establishing a factory in India within the next two years.
Elon Musk, CEO of Tesla, had expressed intentions for a significant investment in India during June 2023, with plans to visit the country in 2024. During Prime Minister Narendra Modi’s visit to the US, he encouraged Musk to explore investment opportunities in India, particularly in electric mobility and the commercial space sector, where Musk’s SpaceX operates prominently.
However, challenges persist regarding India’s import taxes and EV policies, with Musk raising concerns about steep import tariffs. India, on its part, has been cautious about permitting Tesla to sell vehicles manufactured in China, while simultaneously launching initiatives to boost domestic manufacturing.
India’s newly approved EV policy aims to position the country as a manufacturing hub for EVs. Companies setting up manufacturing facilities for EVs will benefit from lower customs duties on imported vehicles for the initial years, subject to meeting localization and investment requirements outlined in the policy.
