India Offers Tesla the Lowest Production Costs in the World: Minister

Tesla recently confirmed it will be building a new factory in Southern India, and a new report suggests that India is prepared to offer major production incentives to the electric vehicle (EV) giant.

On Tuesday, India’s Transport Minister Nitin Gadkari told Reuters that Tesla’s production costs would be less than in China if the EV company could commit to manufacturing its cars in India instead.

Without sharing any specific details, Gadkari said, “Rather than assembling [the cars] in India they should make the entire product in the country by hiring local vendors. Then we can give higher concessions.”

He continued, “The government will make sure the production cost for Tesla will be the lowest when compared with the world, even China, when they start manufacturing their cars in India. We will assure that.”

The move for Tesla to work with local vendors in India would definitely boost the country’s economy, especially in EV-heavy industries like battery cell and software production, among others.

Last year, many countries and states around the world announced plans to ban gas car sales between 2030 and 2040, emphasizing the modern race to electrification.

Will Tesla decide to bite on India’s offer? Without any specific details on the production incentives the country plans to offer, it’s tough to say if Tesla will be able to move the larger parts of its operations to India. But Tesla seems to have a good thing going on in Shanghai, China with its newest Gigafactory, and it’s not likely to give that up or even threaten that relationship – especially with China being the world’s largest auto market.