Elon Musk-led electric carmaker Tesla is making progress with its plan to establish a factory in India, according to government sources. The proposed factory would have an annual capacity of 500,000 electric vehicle (EV) units, and prices for the vehicles could start as low as Rs 20 lakh.
Tesla is also considering using India as an export base to serve markets in the Indo-Pacific region.
India’s trade and industryi ministry is in charge of the negotiations, and the government wants to reach a good agreement that maintains a level playing field. The desire of Tesla to build a facility in India is consistent with its global goal of expanding its production outside China.
The most recent developments follow a meeting between Prime Minister Narendra Modi and Elon Musk that took place during the latter’s state visit to the US. The administration is hopeful that the conversations would result in Musk making large investments in India, as he has previously stated his intention to do.
Tesla previously considered entering the Indian market but encountered difficulties with import taxes and local manufacturing standards. Under the Make in India initiative, the Indian government has been supporting domestic production. The availability of Tesla automobiles for a starting price of Rs. 20 Lakh could be a compelling offer for clients in India’s fast expanding auto market, which is currently the fourth largest in the world.
The Make in India initiative would receive a big boost from Tesla’s possible investment in India, which would also help the nation’s efforts to promote electric mobility.