New Delhi: Tesla Inc., the pioneering electric vehicle (EV) company led by CEO Elon Musk, is intensifying its efforts to establish a significant presence in India. The company plans to dispatch a delegation to India this month to evaluate potential locations for a new electric car manufacturing facility, with an investment projection between $2 billion and $3 billion (approximately Rs 16,700 crore to Rs 25,000 crore), as reported by the Financial Times.
This strategic move follows India’s recent policy adjustment, which saw a reduction in import duties on select electric vehicles. This tax incentive is available to automakers who pledge to invest a minimum of $500 million (over Rs 4,150 crore) and commence local production within a three-year timeframe.
Tesla’s exploration into the Indian market is timely, considering the deceleration in global EV demand and escalating competition in its primary markets, the United States and China. These market dynamics have led to a reported decline in Tesla’s first-quarter vehicle deliveries, falling short of expectations.
The scouting team, arriving from the United States by the end of April, will concentrate on states renowned for their automotive industries, including Maharashtra, Gujarat, and Tamil Nadu. These regions are being considered for their robust automotive infrastructure and conducive business environments.
Musk’s ambition to penetrate the Indian market has been longstanding, with the Indian government emphasizing the need for a commitment to domestic manufacturing. In pursuit of this goal, Tesla has engaged in ongoing discussions with Indian officials, and Musk himself met with Prime Minister Narendra Modi last June.
In a statement last July, Tesla expressed interest in constructing a factory in India to produce an affordably priced EV at $24,000. Additionally, the company has advocated for reduced taxation on its higher-end models intended for the Indian market, as per reports by Reuters.
Analysts predict that Tesla’s foray into India could catalyze further investments in the EV sector and prove advantageous for local auto parts manufacturers, potentially transforming the automotive landscape in the region.
