“Tesla would send a team from the US by late April to study sites for the plant, focusing on states with existing automotive hubs, including Maharashtra and Gujarat in the west and Tamil Nadu in the south,” said a report.
According to reports, Tesla Motors, the US-based electric car manufacturer, is set to dispatch a team to explore potential sites in India for a proposed electric car plant worth $2-3 billion later this month.
Sources indicate that Tesla plans to send a team from the US to assess locations for the plant, with a focus on states housing existing automotive hubs such as Maharashtra and Gujarat in the west, and Tamil Nadu in the south.
This move follows closely after the Commerce Ministry’s recent announcement of a new electric vehicle (EV) policy, which relaxes duties for a limited number of EV imports for manufacturers establishing facilities in India, with a minimum investment of Rs 4,150 crore. While the policy allows for the import of completely built-up (CBU) cars at a reduced 15% duty, the number of four-wheeled EVs eligible for the lower duty is capped at 8,000 per year.
The policy shift appears tailored to facilitate Tesla’s entry into the Indian market, as the company has advocated for reduced import tariffs as a precondition for investing in local manufacturing operations.
India currently stands as the world’s third-largest automobile market, with robust growth anticipated in the automotive sector. The sector’s market size is expected to surpass Rs 24.9 lakh crore by 2030, contributing over 7.1% to India’s GDP.
While some automakers have established plants in Haryana state, Tesla may also explore potential sites around the capital. However, Tesla has yet to respond to requests for comments on these developments.
Reportedly, Indian Prime Minister Modi urged Tesla CEO Elon Musk to invest in India during their meeting in the US last year. Musk committed to bringing Tesla to India “as soon as humanly possible.”
The government has allocated substantial subsidies to encourage manufacturing, particularly in critical sectors like EVs, where China, India’s geopolitical rival, holds a significant advantage.
Tesla has indicated to Indian officials its interest in producing a smaller, more affordable car at the proposed Indian factory, priced below $30,000. This model could potentially be sold in India and exported to various regions including Southeast Asia, the Gulf, Africa, and parts of Europe.
Additionally, Tesla is developing a lower-priced vehicle set to launch late next year, dubbed as “Model 2” by industry observers, but the manufacturing location for this model has yet to be disclosed.
Tesla’s potential expansion of its global factory network coincides with a slowdown in global EV sales growth. The company is also in the process of constructing a plant in Mexico, expected to be operational by 2026.
