The electric car market in India, which now accounts for a small portion of all the vehicles produced in the nation, might experience a major shift as a result of Tesla’s suggested strategy. EV manufacturing Tesla has proposed building a facility in India to assemble its electric automobiles for both domestic and international sales. The news agency reported that the automaker has shown interest in establishing a facility in India to produce electric vehicles there, citing a source with firsthand knowledge of the situation.
The decision may completely alter the Indian EV market, which now accounts for only a small portion of the nation’s overall car production. Tesla’s pricey electric vehicles are likely to drop significantly in price if it is successful in opening an EV manufacturing there. Their officials are visiting India to meet with the government and talk about local part sourcing as well as other topics. Tesla put off selling cars in India for almost a year after failing to negotiate reduced import duties, which Tesla CEO Elon Musk claimed were among the highest in the world. It should be mentioned that their vehicles are expensive, and heavy import taxes would have made them unaffordable for most Indians.
Tesla EV Car Production Plant
The EV automaker had high hopes for India and intended to introduce its electric vehicles there by 2022. Additionally, it intended to establish a factory for electric vehicles in Karnataka. Tesla, however, decided to abandon its ambitions as a result of the tax rate controversy. The Centre was worried that cutting the tax rate might deter other national and international automakers from producing their vehicles in India. In the meantime, the government maintained its ‘Make In India’ campaign and argued that Tesla should produce cars there. Nitin Gadkari, a Union Minister, stated last year that the EV giant was only welcome in the country provided the business agreed to Musk’s announcement that it would not establish a production factory there.
While the Indian government has set an ambitious goal of having 80% of electric two- and three-wheelers and 30% of electric private cars by 2030, the adoption rates across all categories are now atrociously low. A total of 21.7 Lakh electric cars (EVs) were on Indian roads as of March 6, 2023, making up just 0.6% of the country’s 33.8 Cr. total number of vehicles. Electric two- and three-wheeler vehicles are becoming more and more popular, but the market for electric cars has grown more slowly.
Conversation with the Indian government
Tesla announced late last year that it was focused on requesting reduced import duties on automobiles, which can be as high as 100%. The negotiations in India mark a reversal in Tesla’s position. The government wants Tesla to produce cars locally, but the automaker said it first wanted to sell to India to gauge demand. As a result, negotiations came to a standstill. Outside of the US, Tesla operates factories in Brandenburg, Germany, and Shanghai, which is its largest facility globally.
