Tesla Starts Manufacturing Vehicles in Germany for India Shipment

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Three points you will get to know in this article:

  • Company produces Model Y near Berlin; unclear which model Tesla plans for India.
  • EV automaker producing right-hand drive cars, shipping some to India this year.
  • Tesla team to visit India soon to scout sites for $2 Bn manufacturing unit.

Tesla's Manufacturing Initiatives in Germany for Indian Market

Tesla is gearing up its operations in India, with reports indicating that the electric car manufacturer has initiated the manufacturing of vehicles at its facility in Germany, slated for export to India later this year. According to sources disclosed to Reuters, production has already kicked off for cars tailored for the Indian market’s right-hand drive specifications. One source mentioned, “They’ve started putting together the right-hand drive cars designated for India.”

While Model Y rolls off the assembly line near Berlin, there’s uncertainty about which Tesla model will make its way to India. According to reports, Tesla usually leans on its Shanghai export hub for right-hand-drive vehicles, but there’s a push to diversify beyond China.

A source mentioned, “Tesla’s already tapping into parts from India and eyes shifting away from China for more supplies, making India a key sourcing spot.”

In addition to this, Tesla’s plans for India extend to investing in a widespread charging infrastructure across the nation.

Just days after news broke that a team from Tesla was gearing up to explore possibilities in India, there’s been quite a buzz. The word is, they’re eyeing potential spots for a massive $2 billion manufacturing hub in the country. The team’s itinerary? Well, it’s said they’ll be making stops in Tamil Nadu, Maharashtra, and Gujarat to scope out suitable locations. If all goes well, we might see this new plant sprouting up in about two years’ time.

States Competing for Tesla's Attention

But hold onto your hats, because Telangana isn’t content to just sit back and watch. Nope, they’ve thrown their hat into the ring too! Industries minister D Sridhar Babu has let it slip that discussions are underway with Tesla, all in an effort to charm the electric vehicle giant into considering their state as well. Seems like everyone wants a piece of the Tesla pie!”

In the meantime, Rajesh Kumar Singh, the Secretary of DPIIT, mentioned to Bloomberg that it is now up to Tesla to make a decision as the government has already reduced import duty on electric vehicles.

Singh stated, “We will assist them by providing contacts at the state level… There have already been discussions with state governments and the central government. VinFast has already made an announcement and we anticipate a few others.”

Government Initiatives and Reduced Import Tax Rates

Last month, the central government announced a new policy that lowers import tax rates on certain electric vehicles (EVs) if their manufacturers invest a minimum of $500 million in establishing a local plant and begin production within three years. This policy allows companies to import up to 8,000 cars annually at reduced tax rates.

Accelerated Expansion Plans Amid Growing EV Adoption

Tesla has accelerated its plans for expansion in India as the adoption of electric vehicles is gaining momentum in the country. The growth in sales, particularly in the two-wheeler EV segment, has been driven by production-linked incentives (PLIs) and subsidies.

According to government data, electric two-wheeler registrations reached a record high of 1.36 lakh in March this year, with Ola Electric leading the market.

Tesla is actively preparing to expand its operations in India, focusing on manufacturing vehicles tailored for the Indian market at its facility in Germany. Reports suggest a potential $2 billion manufacturing hub in India, with states like Telangana vying for Tesla’s investment. The central government’s initiatives, such as reducing import tax rates on electric vehicles, complement Tesla’s accelerated expansion plans. The surge in electric vehicle adoption in India, especially in the two-wheeler segment, underscores the conducive environment for Tesla’s investments and growth in the country.

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