Tesla is set to hold crucial discussions with India’s commerce minister later this month to explore the establishment of a factory for producing an all-new, affordable electric vehicle (EV). A reliable source with direct knowledge of the matter informed Reuters about the scheduled meeting.
The proposed factory aims to manufacture low-cost electric vehicles for both the domestic Indian market and export purposes. This decision comes after Tesla faced hurdles last year when the Indian government insisted on local production instead of reduced import taxes for EVs.
The forthcoming meeting with the commerce minister represents a significant turnaround for Tesla, especially since Elon Musk’s previous visit to India in June, during which he expressed intentions of making substantial investments in the country.
According to insiders, the new Tesla vehicle, priced at 2 million rupees ($24,000), would be 25% cheaper than the company’s current most affordable model, the Model 3 sedan, which retails for around $32,200 in China.
Notably, electric vehicles currently account for less than 2% of total vehicle sales in India, despite it being the world’s third-largest auto market. However, Tesla’s interest in establishing a manufacturing base in India is expected to accelerate EV adoption in the country.
The talks between Tesla representatives and Indian government officials will revolve around setting up an EV supply chain and securing land for the factory. The commerce ministry has yet to comment on the discussions.
Tesla’s aggressive efforts to reduce the prices of its existing models align with Elon Musk’s vision of achieving long-term success by significantly lowering the cost of electric vehicles. The company claims its next-generation vehicle platform will reduce production costs by 50% and could potentially spawn various models, including an automated “robotaxi.”
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While Tesla already operates production facilities in California, Texas, Berlin, and Shanghai, the new factory in India would mark a strategic move to tap into one of the world’s fastest-growing automobile markets. Tesla’s plant in Shanghai, which is its largest globally, accounts for nearly 40% of the company’s production capacity, with plans for further expansion pending regulatory approval. Tesla’s construction of a new plant in Mexico will also cater to the lower-cost, high-volume vehicle platform. The company plans to replicate this setup in other factories worldwide. However, more details about future models and pricing remain undisclosed.
As Tesla explores new avenues to make EVs more accessible and affordable, the meeting with India’s commerce minister could be a pivotal moment in the company’s global expansion and its contribution to India’s sustainable transportation goals.