In terms of population, India currently leads the world. Just as every other nation has electric vehicles, India must to as well. “It makes sense to offer Tesla electric cars in India,” Musk stated during an X Spaces meeting with Nicolai Tangen, the CEO of Norges Bank Investment Management.
“All vehicles will go electric and it is just a matter of time,” declared the millionaire CEO.
Recently, Tesla has stepped up its attempts to increase its market share in India and is actively looking for a suitable site to build a state-of-the-art manufacturing facility.
The state governments of Gujarat and Maharashtra, according to sources, have made Tesla Inc. attractive land offers for the construction of an EV manufacturing facility. This represents a significant advancement in India’s electric mobility environment.
The projected plant, according to sources, will cost between $2 billion and $3 billion to build and will serve the domestic and foreign markets for Tesla’s electric cars.
The action follows the introduction of incentives for establishing manufacturing plants in India under the country’s new EV policy. Tesla intends to have a strong manufacturing presence in India as a major global producer of electric vehicles.
Several important goals are listed under the government’s EV strategy, which intends to position India as a preferred manufacturing destination for EVs outfitted with cutting-edge technology.
These include encouraging the uptake of cutting-edge EV technology by Indian customers, drawing investments from respectable international EV manufacturers, and supporting the nation’s Made in India campaign.
According to the policy, manufacturers are encouraged to achieve significant levels of domestic value addition (DVA) and a minimum investment threshold of ₹ 4150 crore (USD 500 million). Additionally, the government mandates that, by the third year of the manufacturing unit’s establishment, at least 25% of the parts used to make the vehicles must be sourced domestically. It is anticipated that by the fifth year of operation, this localization level will rise to 50%.
If the firm constructs manufacturing facilities in India within three years, a 15 per cent customs charge will be levied for five years on vehicles priced at USD 35,000.
The policy will set a cap on the overall number of EVs that can be imported, taking into account the amount invested. or, if less, up to a maximum value of ₹ 6484 crore. According to the policy, a maximum of 40,000 EVs can be imported, with no more than 8,000 each year, if the investment surpasses USD 800 million. Import restrictions may be carried over.
Tesla aims to send a team of experts to search India for potential sites for the prospective production facility as part of its investment plans.
By the end of this month, the government will formally welcome applications for the EV tariff reduction initiative, which will permit eligible enterprises to import up to 8,000 vehicles annually, according to a Financial Times article that cited an Indian official.
He had told reporters in New York, following a meeting with Prime Minister Narendra Modi, who was then on a historic four-day State visit to the US.
Musk had said that PM Modi invited him to India.
“I would like to thank PM Modi for his support and hopefully, we will be able to announce something in the future,” Musk had said.
When Piyush Goyal, the Union Minister for Commerce and Industry, visited Tesla’s Fremont, California, manufacturing facility in November 2023, he stated that the American electric vehicle manufacturer was planning to import twice as many components from India.
Mr. Goyal had emphasized how pleased he was with the growing role that Indian auto component suppliers were playing in the Tesla EV supply chain.
