Tesla has been interested in investing in India for years but recent news suggests that an agreement could be settled between the American electric vehicle (EV) company and the world’s most populous nation.
Bloomberg reported that the Indian government and Tesla are closing in on a deal that would allow the American automaker to officially import into the country in 2024 and set up a factory within 2 years.
Sources informed the American business outlet that the new plant’s location is narrowed down to three states, Gujarat, Maharashtra, and Tamil Nadu. Gujarat is the home base of Indian Prime Minister, Narendra Modi while the latter two states have an established base for EV production and exports.
Musk and Modi meeting at Tesla's US plant back in 2015
Aside from assembling future models, Tesla could also produce batteries in India to bring down costs and could invest at least USD 2 billion (RM 9.34 bil) into the subcontinent. Tesla CEO, Elon Musk, announced in June that the company plans to make a ‘significant investment’ in India and intends to visit in 2024.
Tesla currently has factories in the United States, Germany, and China. The latter is where the Malaysian-spec Tesla are imported from (CBU) but if the Tesla-India deal is signed, we might see Indian-assembled Teslas in the future.
Slightly smaller than the Ativa, the Tata Nexon EV starts from around RM 82k after conversion
While the Indian government is pushing to increase domestic manufacturing of EVs and encouraging their use, the Indian EV market is still very small and efforts have been slow. EVs accounted for only 1.3% of the total passenger vehicles sold in 2022.
All the Indian-registered Tesla units featured in this article are brought in via grey importers (Credit: TeslaClubIN)
Some of the issues of buyers’ hesitation with EVs include high upfront costs and lack of charging stations. Tesla does not officially import cars into India because of the high tariffs on imported cars.
In order to encourage foreign brands to sell EVs in the world’s third-largest automotive market, India is considering lowering import taxes for 5 years if the international firms are committed to setting up local plants.
Traded advertising for a career that fits his passion for cars. Enjoys spotting cars during his free time and has a soft spot for Japanese Kei cars but drives a thirsty manual sedan.
