In a promising turn of events, Tesla and the Indian government have engaged in discussions to establish a vehicle assembly plant in India, potentially ending years of stalled negotiations. According to a report by the Times of India, Tesla aims to build a plant with an impressive annual capacity of up to 500,000 cars.
While specific details about the electric vehicle model to be produced in India remain undisclosed, sources suggest that it could start at an affordable price of approximately $24,350 (2 million Indian rupees). This move would position the Indian-built Tesla model as the company’s most accessible option if it materializes.
Interestingly, this price target closely aligns with Tesla’s plans for a compact electric vehicle in China and Mexico. Given India’s favorable production costs, it seems logical for Tesla to consider manufacturing the car within the country.
Furthermore, Tesla is exploring the possibility of using India as an export hub for countries within the Indo-Pacific region, according to government insiders cited by the Times of India. The potential for local manufacturing and exports has generated optimism, with a source expressing confidence in Tesla’s ambitious plan.
Negotiations are being led by the commerce and industry ministry, with the Indian government aiming to strike a favorable deal while ensuring a level-playing field for other automakers. This renewed dialogue follows a recent meeting between Tesla CEO Elon Musk and Prime Minister Narendra Modi on June 21 during the Indian leader’s visit to the United States. During their encounter, Musk praised Modi, labeling himself a “fan” and acknowledging the Prime Minister’s encouragement for Tesla to invest in India.
Musk further stated, “He [Mr. Modi] really cares about India because he’s pushing us to make significant investments in India, which is something we intend to do. We are just trying to figure out the right timing.” He expressed confidence that Tesla would establish a presence in India as soon as feasible.
See also: Elon Musk to Brief Indian Prime Minister Narendra Modi on Tesla’s Manufacturing Plans
India has long been a target market for Tesla; however, the automaker refrained from entering the Indian car market last year due to the government’s reluctance to provide special incentives that would have facilitated the import of electric vehicles at reduced duty rates.
Nevertheless, Tesla reopened discussions with the Indian government in May, with a Tesla delegation visiting the South Asian country a month ahead of Modi’s US visit. The latest developments suggest a promising breakthrough in the Tesla-India relationship, offering hope for a mutually beneficial agreement that would bring Tesla’s production capabilities and economic opportunities to India’s shores.
