Elon Musk’s Tesla US and Tesla India are in discussions with the Indian Government to set up their own supply chains and start manufacturing EVs in India. The factory will have the capacity to make 5 lakh EVs per year, and sell them starting at Rs 20 lakhs
Elon Musk’s Tesla, after delaying for a significant period, has finally initiated talks with the Indian government regarding an investment proposal to establish a car manufacturing plant in India. The proposed factory would have the capability to produce up to 500,000 electric vehicles annually, with prices starting at Rs 20 lakh.
Tesla is also engaged in discussions with the Indian government to consider the potential establishment of its auto parts and electronics chain in India.
As part of these talks, Tesla is also exploring the opportunity to receive incentives and tax benefits. While the Indian government has requested Tesla to evaluate the current auto components supply chain in the country, the company has expressed its interest in creating its own supply chain ecosystem within India.
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In addition to its substantial presence in China, including manufacturing facilities, Tesla is considering India as a potential export hub. The company intends to utilize India as a base for exporting cars to countries located in the Indo-Pacific region.
During his recent visit to the United States, Tesla CEO Elon Musk met with Prime Minister Narendra Modi and expressed his admiration for him. Musk stated that PM Modi genuinely cares about India and has encouraged Tesla to make substantial investments in the country, a commitment that Tesla intends to fulfill.
Furthermore, Musk referred to himself as a “fan of Mr Modi” and expressed his belief that India holds great potential and opportunities, surpassing any other large nation in the world. “He really cares about India because he’s pushing us to make significant investments in India, which is something we intend to do,” Musk said back then.
“We asked them about their specific needs and also urged them to consider sourcing their needs from the Indian ecosystem,” a senior government official told Economic Times, who first reported the story.
“But these companies have a well-oiled system of their suppliers. These are initial talks so we are hopeful of making some headway,” the official said.
Executives from Tesla US and Tesla India had held discussions with senior Indian officials and ministers in May and inquired about the incentives and support structure available for the company and its partners in order to establish a manufacturing facility in India. They were exploring the possibility of setting up manufacturing operations for cars and batteries in India. The company had previously postponed its plans to enter the Indian market due to the high import tax structure.
India’s auto components industry, which contributes 2.3 per cent to the country’s GDP, is projected to become the third-largest globally by 2025, as per the government’s estimates. Notably, Tesla already procures approximately $100 million worth of steering wheel components and other parts from India.
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