Tesla, the world’s leading electric vehicle (EV) manufacturer, is set to enter India with a dual strategy of importing cars and setting up a local plant. The company, LED by billionaire entrepreneur Elon Musk, has reportedly been in talks with the Indian government to finalise the details of its investment proposal and secure various approvals by January 2024.
A new report by Bloomberg, citing sources familiar with the Indian government’s discussions with Tesla’s Indian team, says that India is reportedly on the verge of finalising an agreement with the automaker that would allow it to import its electric cars to the country beginning as soon as next year. Moreover, it could establish a manufacturing facility in India within two years.
The sources, who wish to remain anonymous, say that the announcement regarding the deal could be made during the Vibrant Gujarat Global Summit in January of 2024. In addition, Tesla is exploring Gujarat, Maharashtra, and Tamil Nadu as possible sites for its manufacturing plant, as these states have well-developed electric vehicle ecosystems and export facilities.
Furthermore, as Tesla is interested in bringing its supply chain ecosystem to India, the company is expected to invest about $2 billion initially for its manufacturing plant and aims to increase its purchases of auto parts from India, potentially up to $15 billion. Not only this, but Tesla also explored the possibility of manufacturing some of the batteries in India itself.
”Ministries and government departments have been asked to iron out any differences with Tesla and pave the way for announcing the company’s India manufacturing plan at the earliest,” one of the government officials told ET.
Tesla’s arrival in India is expected to boost the country’s EV sector, which is still nascent and faces challenges such as high costs, lack of infrastructure, and consumer awareness. Tesla would also benefit from this move as it would be able to diversify its sales base. The Indian government has been promoting EV adoption through various incentives and policies, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, the National Electric Mobility Mission Plan (NEMMP) and more.