30 March 2024

Tesla to explore potential sites in India for factory

Electric vehicle major Tesla is gearing up to send a delegation to explore potential sites in India this month for its planned electric car manufacturing facility worth $2 billion to $3 billion, as per sources cited by the Financial Times.
 
This strategic move is owing to New Delhi’s recent tariff reduction on imported electric vehicles (EVs) with higher price tags.

Tesla to explore potential sites in India for factory
Tesla could look at potential sites in Tamil Nadu,
Maharashtra and Gujarat for its India factory. 

The rider here is that companies must commit to local production within three years.


Tesla focus on Maharashtra, Gujarat, Tamil Nadu

Expected to touch down from the United States by late April, the scouting team will mainly focus on states boasting well-established automotive clusters such as Maharashtra, Gujarat, and Tamil Nadu.
 
While Haryana, adjacent to New Delhi, remains on the radar, emphasis seems to be on states with port infrastructure, streamlining the export process for vehicles, as per insiders.


Tesla plan a boost for PM Modi

Should this plan materialise, Tesla's investment could further fortify Prime Minister Narendra Modi's administration as the nation readies for parliamentary elections around May-June.

Indian Prime Minister Narendra Modi had previously encouraged Tesla chief executive officer (CEO) Elon Musk to explore investment opportunities in India during their meeting in the US last year.

Musk, while reflecting on the meeting, underscored Modi's receptiveness to new ventures and his commitment to take India's interests to the next level.


Tesla may inject $30 billion

Tesla has been engaged in advanced discussions for its presence in the Indian market and could potentially inject nearly $30 billion into the economy over the next five years.


Another gigafactory in India?

Furthermore, Tesla may also explore options for establishing a battery production facility in India, replicating its successful “gigafactory” blueprint seen in California, Texas, Berlin, and Shanghai.

A source closely connected to the company and in the know of the project deliberations threw light on the transformative potential of this endeavour. 

He said it is a pivotal moment, similar to Suzuki’s impact on India’s automotive ecosystem and Apple's influence on its manufacturing.
 

India vs China in EVs

India has allocated adequate subsidies to boost manufacturing, particularly in critical sectors like EVs, aiming to close the gap with global leaders like China.

This proactive stance aligns with India's broader vision of fostering self-reliance and promoting sustainable mobility solutions.


Musk-PM proposed meet

Tesla boss Elon Musk has just confirmed that he will visit India to meet Prime Minister Modi, and the billionaire entrepreneur is expected to make an announcement on investment and a factory in the country. This meeting is slated for April 2024.

“Looking forward to meeting with Prime Minister Narendra Modi in India!” he said in a post on X.


Tesla entry-level car

Tesla may be setting up a factory to manufacture entry-level electric cars (such as Model 2 that may be priced around Rs 25 lakh or Rs 2.5 million) for the Indian market as well as exports, especially for the developed nations.

Also, the new friendly EV policy by India may be targeted at attracting giants like Tesla, thus paving the way for making the country an electric vehicle hub. 

READ ALSO | Tesla loses $94 billion as EV winter sets in

E-Vroooom's views

Elon Musk may be seeing the return of Donald Trump as US President, and if this happens, it may badly dent the electric vehicle market in the country as Trump will revive internal combustion engine (ICE) vehicles, and so, it would be natural for Musk to look towards markets like India for Tesla’s growth.

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