Tesla Chief Elon Musk has just hinted at the electric automaker’s imminent penetration into the Indian market, suggesting that recent investment speculations will come to fruition.
Tesla boss hints at imminent arrival to India
CEO Elon Musk asserted in a recent Spaces session with Nicolai Tangen that entering the Indian electric vehicle market is a logical next step for the EV giant, considering that the country has advanced as the third-largest automotive market behind China and the United States.
Moreover, India is also currently the most populous country in the world.
“India is now the most populous country in the world, based on population. India should have electric cars just like every other country has electric cars. It’s a natural progression to provide Tesla electric vehicles in India.”
Tesla CEO Elon Musk
State governments court Tesla
The state governments of Maharashtra and Gujarat are apparently trying to entice Tesla with lucrative land offers as potential locations of its planned local electric vehicle production factory in India, news wire agency ANI reports, citing sources familiar with the matter.
Apart from the two, the Telangana government is also reportedly in talks with the Musk-led company for the same subject.
As EV-a2z recently reported, Tesla’s proposed gigafactory in India is expected to cost $2 billion to $3 billion. The company is planning to deploy its team in the country later this month to scout potential sites for the project.
New EV policy paves the way for Tesla’s investment
India’s announcement of its new electric vehicle policy in mid-March undoubtedly played a significant role in encouraging Tesla to pursue its long-standing plans for the local market.
The Ministry of Heavy Industries indicated that the government will lower taxes on select electric vehicles imported by foreign automakers on one condition: they must commit to investing at least $500 million in local manufacturing and start operation within three years.
Companies adhering to the condition will benefit from a lower tax rate of 15% for a maximum of 8,000 EVs annually. Notably, this rate only applies to models with at least $35,000 CIF value.
It must also be noted that foreign companies must have a minimum Domestic Value Addition (DVA) of 25% by the third year of production and 50% within a maximum of 5 years.
“The Government of India has approved a scheme to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country. The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers.”
India’s Ministry of Heavy Industries
The proposed Giga India is expected to supply electric vehicles to both the local and international market, further boosting Tesla’s presence across the world. In return, it will substantially bolster the local electric vehicle industry in India amid the government’s effort to advance as an ideal investment zone for popular electric automakers.
