According to reports, Tesla Inc., the electric vehicle (EV) car manufacturer owned by Elon Musk, is accelerating its plans to establish a manufacturing facility in India. Representatives of the company are scheduled to meet with Indian Commerce Minister Piyush Goyal this month.
Reportedly, the representatives of Tesla Inc. are preparing to present a detailed plan to the Indian Commerce Minister, outlining their strategy to establish a manufacturing facility for Tesla cars in the country. The primary focus of this facility will be to produce a brand-new car specifically designed for the Indian market, with an affordable price tag of $24,000, taking into consideration the local pricing and requirements.
During the discussions between Tesla and Piyush Goyal, the issues related to the EV supply chain and the allocation of land for the new factory are expected to be brought up and thoroughly addressed. These matters are likely to be key points of consideration in their negotiations.
Tesla U-Turn on Indian Plans
The recent development stands in stark contrast to Tesla’s earlier attempts to persuade the Indian government to reduce import taxes on EV vehicles. The Indian government had imposed high import taxes on EV vehicles to promote local production. This posed a challenge for Tesla, as their cars were already expensive, and adding import taxes and other costs would result in a substantial price increase in India. Such high price tags would likely be impractical in the Indian automobile market.
Great conversation with @NarendraModi https://t.co/UYpRvNywHb
— Elon Musk (@elonmusk) June 21, 2023
The upcoming meeting with the commerce minister marks the highest-level discussion between Tesla and the Indian government since June when Elon Musk had a meeting with India’s Prime Minister Narendra Modi. During that meeting, Musk expressed his intention to make a substantial investment in the country.
Indian Tesla
The Indian version of Tesla is expected to be significantly more affordable than its Western counterparts. Reports suggest that it could even be cheaper than the most budget-friendly Tesla model offered in China. The representatives of Tesla discussed the possibility of introducing a 2 million rupees ($24,000) EV in India, which they described as being 25% cheaper than their current lowest-priced offering, the Model 3 sedan, sold for just over $32,200 in China.
Tesla’s accelerated approach to launching and manufacturing in the Indian market will pose significant challenges for other global EV companies looking to establish a strong presence in the country’s automobile market. They will undoubtedly face tough competition from Tesla. Additionally, it is noteworthy that local automakers like Tata Motors are already leading the market with a majority of EV car sales, further intensifying the competition landscape.
A few days ago, the Chinese automaker BYD faced rejection from the Indian government for its proposed EV manufacturing plant in India, which was intended to be a joint venture with an Indian company. The Indian government cited security concerns as the reason for rejecting the project. However, it is widely assumed that Tesla is unlikely to encounter similar issues due to the strong bond between Elon Musk and Prime Minister Narendra Modi.
