Tesla India launch under consideration
Tesla has expressed its interest in establishing a factory in India to manufacture electric vehicles for both domestic market and exports. The proposal was presented to the Indian government officials on Wednesday.
This development comes in response to India’s refusal last year to lower the hefty import tax on cars, which can reach up to 100%. India had urged Tesla to manufacture vehicles locally, the company initially sought to enter the market through imports for testing purposes, leading to a deadlock in negotiations.
During the recent discussions, Tesla did not raise the topic of reducing import taxes. Instead, it proposed setting up of a new factory, although specific details such as location and investment are not disclosed yet.
The move aligns with the Indian government’s “Make in India” initiative, which aims to attract companies by promoting local manufacturing and diversifying supply chains away from China.
To further explore possibilities for local production, senior Tesla executives are currently in India, in talks with government representatives. These discussions have included meetings with officials from Prime Minister’s office and various ministries.
It is worth noting that Tesla’s renewed interest in India comes nearly a year after the company halted its plans to sell cars in the country due to the inability to secure lower import taxes, which CEO Elon Musk has criticised for being among the highest in the world. Despite hiring a local team and initiating the search for showroom space, these efforts were abandoned last year.
This meeting between Tesla and Indian officials takes place ahead of Prime Minister’s upcoming visit to the United States next month. The outcome of these discussions could have significant implications for Tesla’s entry into the Indian market and the country’s electric vehicle industry as a whole.