Tesla Scout Team Heading to India for $2 to $3B EV Plant

Tesla, Inc. is an American multinational corporation that specializes in electric vehicles, renewable energy, and other advanced technologies. The company was founded in 2003 by Elon Musk and others, and it has since become one of the world’s leading producers of electric cars. Tesla’s vehicles are known for their high-performance, stylish designs, and cutting-edge technology. The company also produces solar panels and renewable energy systems for residential and commercial use. In addition to its automotive and energy products, Tesla is working on several other exciting projects, including self-driving cars and artificial intelligence.

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In a bid to expand its presence in India, the renowned global electric vehicle manufacturer Tesla Motors is gearing up to dispatch a team to the country later this month. Their mission? To scout out suitable locations for their inaugural $2-$3 billion (approximately INR 16 to 25 thousand Crores) factory.

As per a report from the Financial Times, this team hailing from the United States will be fanning out across Maharashtra, Gujarat, and Tamil Nadu. Their task is to pinpoint potential sites where the manufacturing plant could take root.

The choice of these three states is no coincidence. They offer convenient access to ports, facilitating smooth exports, as highlighted by a source cited in the report.

The recent development occurred shortly after the government approved a new policy that allows electric vehicle (EV) companies to receive reduced import duties on EVs if they commit to establishing manufacturing facilities within the country.

According to the program, the import duty on vehicles with a Cost, Insurance, and Freight (CIF) value of $35,000 or more will be decreased to 15% for a period of five years for companies that commit to investing at least INR 4,150 crore (approximately $500 million) in India to establish manufacturing plants.

The policy, announced on March 15, fulfilled a significant requirement of Tesla before it entered the Indian market.

Reports last year indicated that the electric car manufacturer, led by Elon Musk, intended to invest $2 billion in India to establish a factory. However, the company requested a 15% duty concession on its imported vehicles for the initial two years.

According to a report by FT, Tesla is gearing up to roll out a more affordable electric car dubbed as “Model 2” from its Indian factory by the close of 2025. This nifty electric ride is anticipated to hit the market with a price tag of approximately $24,000 (INR 19.87 Lakh). The company envisions cranking out a whopping 500K cars annually once its factory hits full throttle.

Moreover, post the establishment of its manufacturing hub, Tesla is eyeing investments in a battery storage system factory within the country’s borders.

Tesla’s arrival in India coincides with a surge in the adoption of electric vehicles across the nation. With support from both the central and state governments through incentives, the shift towards electric vehicles is most prominent in the two-wheeler segment, which is bustling with various startups.

Last month marked a significant milestone as registrations for electric two-wheelers surpassed the 100,000 mark for the first time. This remarkable achievement was propelled by a notable uptick in sales across many manufacturers in this category. Among them, Ola Electric stands out as the leader in terms of sales.

Tesla Motors is poised to establish its first $2-$3 billion factory in India, with a team scouting locations in Maharashtra, Gujarat, and Tamil Nadu. India’s new policy offers reduced import duties for electric vehicle (EV) companies committing to local manufacturing, aligning with Tesla’s entry requirements. Tesla plans to launch the more affordable “Model 2” from its Indian factory and aims to produce 500K cars annually. The surge in electric vehicle adoption, particularly in the two-wheeler segment, is buoyed by government incentives and marked by over 100,000 electric two-wheeler registrations, with Ola Electric leading sales.