After years of indecision, Tesla, led by Elon Musk, has initiated discussions with the Indian government regarding an investment proposal to establish a car manufacturing facility in the country. The proposed factory would have an annual capacity of up to 500,000 electric vehicles, with prices starting at Rs 20 lakh. Tesla, which already has a significant presence in China with its factories, is also considering India as an export hub for shipping cars to countries in the Indo-Pacific region. The Indian government, led by the Commerce and industry ministry, is actively engaged in talks with Tesla, aiming to negotiate a mutually beneficial agreement while ensuring a level playing field. Read More Business News on our website.
Although a questionnaire sent to Tesla’s headquarters in the US remained unanswered at the time of this report, the company’s renewed interest in investing in India coincides with a recent meeting between Elon Musk and Prime Minister Narendra Modi during the latter’s high-profile visit to the US. During the meeting, Musk expressed his admiration for PM Modi and revealed that the PM had been encouraging him to invest in India.
Musk further stated that Tesla intends to invest in India, and they are currently determining the appropriate timing for such an endeavor. Tesla’s reengagement with the Indian government began in May, with a visit from a team representing the company preceding PM Modi’s trip to the US. This potential investment in India aligns with Tesla’s global strategy of diversifying production locations beyond China, although Musk remains optimistic about the prospects of the Asian manufacturing powerhouse.
If the investment proposal is approved, it would be a significant boost to the Indian government’s “Make in India” initiative. This initiative has already attracted substantial investments from companies like Apple’s vendors, who have established domestic production facilities and utilized India as an export base.
Tesla has shown interest in the Indian market for several years but withdrew its plans last year when it failed to secure special incentives from the government to import its cars at a reduced duty. The government remained steadfast in its stance, insisting that Tesla manufacture vehicles locally instead of importing them from other locations, including China.
India, on its part, has been actively promoting the immense potential of the domestic automobile market. The country now ranks as the world’s fourth-largest car market, trailing only China, the US, and Japan, with approximately 3.9 million units sold last year.
If approved, Tesla’s investment in local manufacturing would not only align with the government’s objectives but also position India as a strategic hub for Tesla’s operations in the region.