Tesla has yet to officially decide on its plans to penetrate the Indian electric vehicle market after previous disagreements with the government regarding import tariffs. Interestingly, a recent report suggests that Tesla may source its model imports from the Giga Berlin in Germany for the Indian market.
Report highlights
The Indian Government discouraged Tesla from importing any electric vehicle models from China for its planned market entry in the country, MoneyControl reports, citing “well-informed sources.”
The reason behind this is apparently the reluctance of the Indian officials to have such ties in China. Instead, it wants the Musk-led company to also adhere to the long-standing partnership between India and Germany.
“Due to geopolitical tensions between India and China, the top management at Tesla has been categorically told by the ministries not to import any car from the world’s largest EV market. Moreover, Indo-German ties on multiple disciplines have been inked earlier and the US EV maker is encouraged to leverage the same.”
An unnamed source who works in an advisory capacity
Another report source also asserted India’s role in producing the highly awaited mass-market Tesla EV.
“While Tesla has earmarked its German facility for its most affordable car, it expects sizable volumes of this model from the Indian market. The unnamed Rs 20 lakh car, will initially follow the Completely Knocked Down (CKD) route with kits being imported from Germany and will later be heavily indigenised in India.”
One of the unnamed sources
About Giga Berlin
Tesla spent an astounding €5 billion to build the Gigafactory Berlin in Brandenburg, Germany. It signifies the company’s first-ever European EV factory.
It currently focuses on the production of the popular electric crossover, Tesla Model Y. The EV giant expects the facility to hit an annual production output of 1 million units at full capacity.
EV-a2z also recently reported Tesla Chief Elon Musk’s announcement during his visit to the Gigafactory Berlin that the company will launch the production of the $25,000 EV there.
The move hints at the imminent availability of the low-cost Tesla model for European customers, as the company seeks to compete with cheap Chinese-made models.
Tesla’s condition
Drive Tesla Canada noted that Tesla reiterated its demand for the Indian Government to reduce import tariffs for its Completely Built Up (CBU) EVs.
Fortunately, the government officials have a positive outlook on this long-standing request, assuming that the imports will come from Germany rather than China.
“Tesla was seeking concessions on the import of electric cars from other countries. So models brought in as Completely Built Up (CBU) from Germany can be slashed by 20-30 percent, which will be a boon not only for Tesla, but other luxury carmakers based there, such as Mercedes, BMW, Audi, etc.”
An unnamed source who works in an advisory capacity
One of the sources further explained how launching the Tesla Model Y in India before its other offerings will be strategic for the company.
“…luxury electric SUVs are gaining a lot of traction in Europe and India. So, it will be more prudent to launch Model Y in India in the initial phase than the Model 3 sedan which is made in the US and China.”
One of the unnamed sources
All that said, Tesla may need to adhere to the Indian Government’s demand to import the EVs from Germany for the company to secure a reliable assessment of customer demand for its models. It will enable Tesla to gain a sufficient understanding of whether launching a domestic production in the country would be worth it.
