Elon Musk’s Tesla and India are closing in on an agreement that would allow the automaker to ship its electric cars to India from 2024 and set up a factory within two years, a report by the news agency Bloomberg said on Monday (Nov 21). Speaking to Bloomberg, people familiar with the developments said that an announcement could come at the Vibrant Gujarat Global Summit in January.
One of the persons said the states of Gujarat, Maharashtra and Tamil Nadu are under consideration as they already have well-established ecosystems for electric vehicles (EV) and exports.
Another person said that Tesla will commit an initial minimum investment in any plant of around $2 billion, and would look to increase purchases of auto parts from India to as much as $15 billion. The automaker will also seek to make some batteries in the country to bring down costs, the person added.
Indian minister visits Tesla plant, hails automaker’s ties with New Delhi
Nearly a week back, Indian Trade Minister Piyush Goyal visited Tesla’s factory in California’s Fremont and hailed the automaker’s ties with New Delhi. Trade Minister Goyal said that Tesla was on track to double its import of components from India.
In a post on X, Goyal said that he was proud to see the growing importance of auto component suppliers from India in the Tesla EV supply chain.
The Modi government has been pushing to increase domestic manufacturing of EVs and encourage a more rapid adoption of cleaner transport. Bloomberg reported that in India, the demand for EVs is growing among aspirational middle-class consumers, and this could be a boon for Tesla.
Currently, the automaker doesn’t import cars directly to India due to the high tariffs that are levied. Bloomberg also reported that when its first locally made cars do go on sale they could retail for as little as $20,000.
Elon Musk has criticised India’s high import taxes and its EV policies. India, meanwhile, advised Tesla not to sell cars in the country that have been made in China.
(With inputs from agencies)