 "Tesla factory likely in Maharashtra, Gujarat or Tamil Nadu, to send team by April-end to finalise site")
Tesla will soon start looking for possible sites where it plans to build its Indian factory. The EV maker is set to dispatch a team from the United States to India by the end of this month to look for potential sites and finalise the location for their EV plant in which they plan to invest about $2-3 billion.
As per a report by The Financial Times, the team will evaluate locations for the plant and will be focussing particularly on Maharashtra, Gujarat, and Tamil Nadu, states which are known for major automotive manufacturing hubs.
While some automakers have established plants in Haryana, Tesla will be setting up their factory in a coastal state to their access to ports. This would make it much easier for them to import components for their EVs in India, as well as export semi-assembled components as well as EVs as CBUs to other countries, the report claimed.
India recently announced a reduction in import taxes on specific electric vehicles, provided the carmakers commit to investing at least Rs 4,150 crore within a three-year timeframe for initiating commercial production.
Tesla’s potential venture into the Indian market coincides with a slowdown in EV demand and increased competition in its primary markets of the US and China, resulting in a decline in first-quarter deliveries and missing estimated targets for the EV manufacturer.
Reports also suggest that Tesla may eventually set up its own battery manufacturing plant, based on Gigafactory model that they have implemented in their EV factories in California, Texas, Berlin, and Shanghai. In all of these factories, Tesla’s suppliers have operation centres adjacent to or near the primary plant.
Impact Shorts
More ShortsElon Musk, CEO of Tesla, has endeavoured to penetrate the Indian market for several years; however, New Delhi has sought a commitment to local manufacturing. Discussions between Tesla officials and government representatives have been ongoing over the past year, with Musk personally meeting Prime Minister Narendra Modi in June.
In July of the previous year, the company expressed interest in constructing a factory in India to manufacture an EV priced at $24,000, while also advocating for reduced taxes on higher-priced models intended for the Indian market, as reported by Reuters.
Tesla’s potential entry into the Indian market is expected to catalyse further investments in EVs and potentially benefit Indian-based auto parts manufacturers, analysts suggest.
Additionally, the EV policy stipulates that achieving a localisation level of 25 per cent by the third year and 50 per cent by the fifth year of operation in India is mandatory to qualify for the reduced custom duty of 15 per cent on CBUs.
This requirement applies to cars priced at a minimum value of $35,000 (approximately Rs 29 lakh), inclusive of costs such as insurance and freight charges.
Industry analysts believe that this move will enable the Indian automotive sector to access global technologies, diversify product offerings, and enhance cost competitiveness, thereby facilitating increased adoption of EVs.
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