Tesla reportedly plans to buy automotive parts worth as much as $1.9 billion from Indian suppliers, according to the Union Minister’s remarks at the 63rd Automobile Component Manufacturers Association (ACMA) on Wednesday.
That amount represents an almost twofold increase from the electric vehicle giant’s $1 billion in imported parts from the local market, BNN Bloomberg reports.
“Tesla already last year bought $1 billion of components from I think all of you sitting here. I have the list of companies who supply to Tesla. This year their target is nearly $1.7 billion or $1.9 billion (is) what they mentioned.”
Union Minister Piyush Goyal
India to boost EV incentives
The Union Minister also announced the government’s plans to draft a new electric vehicle policy.
The move is part of India’s efforts to attract more investments from global players in the EV industry, particularly Tesla.
“We will come out with a policy. As we get large-scale production, we will start enjoying the fruits of economies of scale of new technologies.”
Union Minister Piyush Goyal
The Indian Government also previously announced that it would reduce EV import taxes from 100% to just 15% in late August. To qualify, electric automakers must produce 40% of the vehicle domestically.
Indian officials have yet to announce the potential incentives under the planned new EV policy. Nonetheless, they expect it to further accelerate the country’s shift to clean mobility.
India’s EV boom
India has already registered more than 2.8 million electric vehicles, according to mint.
Considering this notable EV boom in the country, the industry now expects to achieve a 94.4% CAGR (Compound Annual Growth Rate) by 2030.
Moreover, it also forecasts the local EV market to hit a valuation of $114 billion by 2029 from just $3.21 billion in 2022.
Tesla CEO remains optimistic about India’s potential
Tesla and the Indian Government restarted their investment negotiations in May 2023 after stopping for a year.
The Musk-led company initially planned to import its electric cars in the country in 2021. However, Tesla failed to push the government to lower vehicle tax imports that hit 100% for $40,000+ EVs.
At that time, India demanded that the automaker establish local production before granting its request to lower import taxes.
The two parties now seem to find common ground in a significant development. Tesla recently confirmed plans to produce a $24,000 EV in the country for the local market and export.
Tesla Chief Elon Musk even stated he is a “fan of Mr. Modi,” further noting that India had “more promise than any large country in the world” following his meeting with the Prime Minister in June.
“He (PM Modi) really cares about India because he’s pushing us to make significant investments in India, which is something we intend to do.”
Tesla CEO Elon Musk
See Also:
- Tesla drives India to contemplate import tax cut on one condition, sources reveal
- Tesla and Indian government negotiations continue to progress
- Tesla executives met with an Indian investment agency for market entry negotiation
- Tesla to meet India’s commerce minister to discuss factory plan for the $24,000 EV
- Tesla, India already in talks to build a Gigafactory for EVs starting at ₹20 lakh
Tesla CEO Musk’s previous announcements that the electric automaker will have a “significant investment” in India seem to start materializing. Tesla’s imminent presence in the country will undoubtedly aid in expanding the local EV industry and boost the economy.
