- Elon Musk had previously pleaded with the Indian government to provide its vehicles with a local tax exemption.
- India has long encouraged Tesla to establish a factory in the country.
- Tesla could build its $25,000 EV in India and export it globally.
Tesla is toying with the idea of establishing a factory in India and will send a team from the U.S. to explore potential sites.
The American carmaker and EV leader has long been interested in entering the Indian market. In 2022, chief executive Elon Musk asked the Indian government to not hit the brand’s models with local tariffs set as high as 100% on imported vehicles, allowing Tesla to sell its Chinese-made vehicles in the country. However, the local government refused this request and encouraged Tesla to establish a local factory.
Read: Tesla Makes New Proposal To Establish A Factory In India
Sources understand that Tesla will send a team to study potential sites for an electric vehicle plant that could require a $2 billion – $3 billion investment. Tesla is thought to be most interested in states with existing automotive hubs like Maharashtra, Gujarat, and Tamil Nadu. All three are near ports and would make it easier for Tesla to export the EVs it builds locally. One source claims Tesla is also investigating Haryana state near the country’s capital of New Delhi.
In addition to the considerable investment to be made by Tesla, suppliers would also invest billions of dollars more in the effort to build a new model from the brand. The automaker is thought to be targeting a factory with the capacity to build up to 500,000 vehicles annually. It may also look to build a battery plant in the country.
Indian Prime Minister Narendra Modi will provide billions of dollars worth of government subsidies to promote local manufacturing in the country, particularly for critical industries like electric vehicles.
The Financial Times understands Tesla has told Indian officials that it could build its long-promised ~$25,000 EV in the country. If built in India, this model could be exported to South East Asia, the Middle East, Africa, and parts of southern and eastern Europe. Last year, Musk said Tesla would “be in India…. as soon as humanely possible.”
