Tesla has opened discussions with the Indian government. The conversation revolves around a proposal to establish a car factory in India with an annual capacity of producing up to 500,000 electric vehicles, reports Times of India.
These vehicles would have a reported starting price of Rs 20 lakh ($24,380 USD), making them an accessible option for many Indian consumers. It’s likely these would be for the production of Tesla’s next-gen vehicle, which will be built at Giga Mexico, made to be more affordable for consumers, the elusive $25,000 USD EV.
The company, which already has a significant presence in China, including factories, is also considering India as a possible export base. From here, it plans to ship cars to countries within the Indo-Pacific region, according to sources from the government.
A source said, “Tesla has come to us with an ambitious plan, and we are confident that the progress will be positive this time around, especially as it involves both local manufacturing and exports.” The commerce and industry ministry is at the forefront of these talks, with the government striving to put together a ‘good deal’ while maintaining a level playing field.
Tesla’s renewed interest in investing in India comes shortly after CEO Elon Musk’s meeting with Indian Prime Minister Modi during his high-profile visit to the US last month. Musk expressed admiration for the PM and highlighted Modi’s encouragement for him to invest in India.
This potential investment in India is viewed as part of a global strategy by companies to diversify their production bases beyond China. If the proposal goes through, it will be a significant win for the Indian government’s ‘Make in India’ campaign, which aims to attract foreign companies to manufacture locally.
Tesla has been interested in the Indian market for years but had previously abandoned plans after failing to receive special incentives from the government for importing its cars at lower duty. Now, the government has insisted on local manufacturing rather than importing vehicles from other locations. This push aligns with India’s aggressive marketing of its local car market potential, currently the world’s fourth-largest.