Tesla plans to scout sites for EV plant in India: Report

Elon Musk Tesla

Elon Musk’s Tesla is looking into potential locations in India for its proposed electric car manufacturing plant, with an investment ranging between $2 billion to $3 billion, according to a report from the Financial Times.

India recently reduced import taxes on certain electric vehicles, provided carmakers invest at least Rs. 4,150 crore and commence commercial production within three years.

Tesla intends to send a team from the United States by late April to scout sites for the plant, with a focus on states like Maharashtra, Gujarat, and Tamil Nadu, due to their automotive hubs. Although Haryana also hosts automotive plants, Tesla prefers states with ports for easier car exportation.

This move by Tesla coincides with a slowdown in EV demand globally, prompting the company to report a decline in first-quarter deliveries. Nonetheless, the company might consider establishing its battery plant similar to its “gigafactories” in California, Texas, Berlin, and Shanghai.

India gets closer to Tesla deal for EV imports and plant setup

Elon Musk has been striving to enter the Indian market for years, with talks ongoing between Tesla officials and Indian government representatives since last year.

The company expressed interest in manufacturing an EV priced at $24,000 in India, along with a request for reduced taxes on higher-priced models.

Tesla’s potential entry into the Indian market could encourage further EV investments and benefit local auto parts manufacturers, analysts suggest.

The Indian government mandates a localization level of 25% by the third year and 50% by the fifth year for availing lower custom duty on Completely Built Units (CBUs), applicable to cars priced at a minimum of $35,000.

Industry experts believe this policy could facilitate access to global technologies, expand product ranges, and enhance cost competitiveness, ultimately promoting greater EV adoption in India.