Tesla, led by Elon Musk, has finally entered into discussions with the Indian government regarding its investment proposal to establish a car manufacturing plant in India. The proposed factory aims to have the capacity to produce up to 500,000 electric vehicles annually, with prices starting at Rs 20 lakh.
Discussions for Auto Parts and Electronics Chain
Alongside the car manufacturing plant, Tesla is also engaged in talks with the Indian government to explore the potential establishment of its auto parts and electronics chain in India. As part of these discussions, the company is considering incentives and tax benefits. The Indian government has requested Tesla to assess the existing auto components supply chain in the country, but Tesla has shown interest in creating its own supply chain ecosystem within India.
India as an Export Hub and Musk’s Praise for PM Modi
In addition to its significant presence in China, including manufacturing facilities, Tesla views India as a potential export hub. The company plans to leverage India as a base for exporting cars to countries in the Indo-Pacific region. During Elon Musk’s recent meeting with Prime Minister Narendra Modi, Musk expressed his admiration for PM Modi, emphasizing his genuine care for India. Musk also stated that PM Modi has encouraged Tesla to make substantial investments in the country, a commitment that Tesla intends to fulfill.
Progress and Potential of Tesla’s Expansion in India
Tesla executives from both the US and India held discussions with senior Indian officials and ministers in May. They inquired about incentives and support structures available for the company and its partners to establish a manufacturing facility in India. The company had previously postponed its plans to enter the Indian market due to the high import tax structure. Notably, Tesla already procures around $100 million worth of steering wheel components and other parts from India, highlighting the existing business ties between the company and the country.
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