Tesla Eyes India for Low-Cost $24,000 EV Factory, Says Report
Tesla is preparing to hold discussions with India’s commerce minister this month regarding potential plans to establish a factory in the country. This facility would produce a new, low-cost electric vehicle (EV) priced at $24,000, according to an individual familiar with the matter, reports Reuters.
The person disclosed that Tesla expressed interest in constructing an Indian factory to manufacture affordable EVs for both the local and export markets. This move represents a stark pivot from last year when efforts to reduce import taxes on EVs for the Indian market were met with resistance. The pushback came from government officials insisting on local manufacturing commitments.
This high-level meeting signifies the most significant interaction between Tesla and the Indian government since June. At that time, Elon Musk, Tesla’s CEO, met with Prime Minister Narendra Modi, expressing his intentions for substantial investment in the country.
Tesla’s proposed EV, priced at 2 million rupees ($24,000 USD), is set to be 25% cheaper than their current most affordable offering, the Model 3 sedan, which retails for just over $32,200 in China.
Electric vehicles currently make up less than 2% of total vehicle sales in India, the world’s third-largest auto market. Tesla executives visited India earlier this year, engaging in talks on establishing a manufacturing base for cars and batteries in the country. These talks are set to resume this month.
According to the sources, Tesla representatives are scheduled to meet Indian Commerce Minister Piyush Goyal. Discussions are anticipated to focus on establishing an EV supply chain and land allocation for a potential factory.
Tesla has been notably proactive in reducing the costs of its existing models since the beginning of the year. Elon Musk has frequently stressed the company’s long-term success is heavily dependent on significantly reducing the cost of EVs.
The company stated that its next-generation vehicle platform would decrease production costs by 50%. It could also be utilized to build multiple models, including an automated “robotaxi”. However, Tesla has not yet revealed any details about these future models or their pricing.
The news from Reuters corroborates a previous report earlier this month that said Tesla was in talks for a next-gen factory in India.
Outside of North America, Tesla has manufacturing plants in Berlin and Shanghai. The Shanghai facility is Tesla’s largest, accounting for almost 40% of the automaker’s global capacity. Expansion plans for this site are currently awaiting regulatory approval. Tesla also is set to build a next-gen EV factory in Mexico, and now it appears India may also be part of this next move.