Minister of Commerce and Industry Piyush Goyal announced that Tesla, a prominent US electric vehicle manufacturer, would double its imports of auto components from India during a visit to the company’s Fremont, California, production facility. The minister is on a four-day visit to the US. Elon Musk, the CEO of Tesla Inc., the largest electric car manufacturer in the world, met Prime Minister Narendra Modi in June in New York. Following their discussion, Musk announced his intention to travel to India in 2024.
“Went to Tesla’s cutting-edge production plant in Fremont, California. We are incredibly happy to note that skilled Indian engineers and finance professionals are contributing to Tesla’s incredible quest to reinvent mobility in senior roles. I’m glad to see that Indian auto component suppliers are becoming more and more significant in the Tesla EV supply chain. It is en route to double its imports of Indian components. I hope Mr. Elon Musk makes a full recovery. I really missed his electrifying presence,” Goyal posted on social media site X.
The visit coincides with rumours that India may consider reducing Tesla’s customs duties in exchange for the company establishing a facility there. Goyal stated in September that the company plans to source parts from India for about USD 1.9 billion this year as opposed to $1 billion in 2022.
What does the minister’s visit to the Tesla facility mean?
The need for electric vehicles will rise in the future, which will support the industry’s expansion. The government has said that it is not planning to create a new policy just to offer incentives to Tesla and that the firm is welcome to apply for support measures under already-existing programmes like PLI for auto and advanced chemical cells.
In response to the minister on the platform, Musk stated: “It was a privilege to have you come to Tesla! I apologize for being unable to visit California today, but I hope to see you at a later time.
With an investment of Rs 18,100 crore for advanced chemistry cell (ACC) battery storage and Rs 26,058 crore for auto, auto-components, and drone industries, the government has launched production-linked incentives (PLI) schemes.
In September, Goyal responded to a question about whether the government is thinking of lowering duties on fully built-up units in an effort to draw specific types of electric cars into India by saying, “Everything we have done has been done equally without any differentiation, without any preferences.” This is the government that gives everyone the same opportunities. Thus, we shall release a policy.”
Musk had stated in August 2021 that if Tesla was successful in selling imported cars in India, the company might open a manufacturing facility there. With regard to India, he had stated that Tesla intended to introduce its cars there, “but import duties are the highest in the world by far of any large country!” Presently, cars that are fully imported into India and have a CIF (Cost, Insurance and Freight) value of more than USD 40,000 are subject to a 100% import charge, while cars that are less expensive are subject to a 70% import duty.
