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HomeNewsTesla to start searching site in India for $2 bn-$3 bn electric...

Tesla to start searching site in India for $2 bn-$3 bn electric car plant: Report

Apr 03, 2024 09:31 PM IST

Tesla’s reported push into India comes at a time when EV demand is slowing in its main markets of the U.S. and China while competition there is heating up.

Electric vehicle giant Tesla is poised to send a team to scout locations in India this month for a potential $2 billion to $3 billion electric car plant, the Financial Times reported citing people familiar with the matter. This move follows New Delhi’s recent reduction in tariffs on higher-priced imported electric vehicles (EVs) for companies committing to domestic production within three years.

Prime Minister Narendra Modi shakes hand with Tesla chief executive Elon Musk during their meeting in New York City, New York, U.S., June 20, 2023(via Reuters)
Prime Minister Narendra Modi shakes hand with Tesla chief executive Elon Musk during their meeting in New York City, New York, U.S., June 20, 2023(via Reuters)

The scouting team, slated to arrive from the US by late April, will primarily target states with established automotive hubs such as Maharashtra, Gujarat, and Tamil Nadu, the FT reported. While Haryana, neighbouring New Delhi, could also be considered, the focus appears to be on states with port facilities, facilitating easier export of cars, according to the report.

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If confirmed, Tesla’s investment could further bolster Prime Minister Narendra Modi’s government as the country approaches parliamentary elections.

Read: India’s ‘Suzuki moment’ with Tesla? ‘Musk really admires what Modi has done’

Prime Minister Modi had previously urged Tesla CEO Elon Musk to invest in India during their meeting in the US last year.

“He (Modi) wants to be open, he wants to be supportive of new companies and make sure it accrues to India’s advantage. Which is, obviously, that’s the job,” Musk had said after meeting the prime minister.

Hindustan Times reported in January that Tesla was in advanced talks to enter the Indian market and may invest nearly $30 billion over the next five years. Tesla may also explore setting up a battery plant in India, akin to its “gigafactory” model seen in California, Texas, Berlin, and Shanghai.

Read: ‘I am a fan of Modi’: Tesla CEO Elon Musk after meeting PM in New York

A person close to the company and involved in discussions on the project said this could well be “Suzuki moment” for India’s EV industry and and the “Apple plus moment” for India’s manufacturing aspirations.

India has allocated substantial subsidies to bolster manufacturing, particularly in crucial sectors like EVs, where it aims to narrow the gap with China.

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