Tesla plans to send a team to examine potential locations for a proposed $2 billion to $3 billion electric car manufacturing in India by late April. The company’s suspected entry into India coincides with a slowdown in EV demand and heightened competition in its two primary markets, China and the United States. As a result, Tesla missed projections and reported a decline in first-quarter deliveries.
Tesla EV Hub
Tesla is allegedly concentrating on states with port capabilities, which facilitates car exports, even if Haryana is home to some automakers as well.
At full capacity, the factory hopes to produce up to 500,000 cars annually. There are also plans to build battery plants similar to Tesla’s “gigafactories” in other areas. India last month reduced import taxes on some electric vehicles (EVs) made by automakers who promise to invest at least $500 million and begin producing the vehicles domestically within three years. This development was perceived as supporting Tesla’s market strategy.
The company has been trying to enter India for years, but New Delhi asked that a commitment be made to local production.The Indian automaker Tata Motors dominates the modest but expanding EV sector in India. In India, EV sales accounted for just 2% of all auto sales in 2023; the government wants to see 30% of sales by that time.
Analysts have speculated that Tesla’s prospective entry into the Indian market would encourage more investments in electric vehicles and help Indian auto component manufacturers.
The EV policy further stipulated that in order to qualify for the reduced custom duty of 15% on Completely Built Units (CBUs), a localization level of 25% by the third year and 50% by the fifth year of entry into India is required.
It would be applicable to cars that cost at least $35,000 (about Rs 29 lakh), including freight, insurance, and other costs.
Over the past year, Tesla representatives have held discussions with government representatives; in June, Musk met with Prime Minister Narendra Modi. According to analysts in the auto industry, the move would also open up access to global technologies, increase the range of products offered, and boost cost competitiveness for the Indian automotive sector all of which would contribute to increased adoption of electric vehicles.
