Tesla, the electric vehicle (EV) company headed by billionaire Elon Musk, is currently in discussions with the Indian government to set up a factory that would have the capacity to produce about 500,000 EVs each year, as reported by the Times of India. Furthermore, the company is contemplating using India as a manufacturing base for exporting vehicles to countries in the Indo-Pacific region.
As per government sources mentioned in the report, Tesla aims to introduce its electric cars in the Indian market starting at a price of 2 million rupees ($24,400.66). This price point is more than twice the cost of India’s most affordable EV, the MG Comet, and half a million rupees more expensive than the Tata Nexon EV, which is currently the top-selling electric car in the country.
Tesla encountered challenges in entering the Indian market last year when the government refused to decrease vehicle import duties. India imposes import tariffs of up to 100% on EVs. Despite the Indian government’s interest in having Tesla manufacture cars locally, the company expressed its preference to initially export vehicles to India to gauge the market demand for its products.
In a recent meeting between Elon Musk and Indian Prime Minister Narendra Modi, the Prime Minister urged Tesla to make a substantial investment in the country. As a result, Tesla engaged in talks with government officials in May to explore the incentives available for EVs and battery production.
@elonmusk likes Modi. Tesla in talks with India for 500k units. pic.twitter.com/mfrsK6VykP
— Tesla Synopsis (@TeslaSynopsis) July 13, 2023
This time, negotiations are being led by the Indian Ministry of Commerce and Industry, with the aim of striking a favorable deal while ensuring fair competition between local manufacturing and exports, as per local media reports.
If Tesla’s plans materialize, it would represent a significant advancement for the Indian automotive sector and the country’s endeavors to promote sustainable transportation. With a proposed annual capacity of 500,000 EVs, Tesla could play a key role in driving India’s shift towards electric mobility.
As discussions between Tesla and the Indian government progress, both sides are striving to reach an agreement that would facilitate Tesla’s entry into the Indian market and potentially establish the country as a key manufacturing and export center for the company in the Indo-Pacific region.
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