Nilanjan
Tesla, the world’s most valuable car company, is finally ready to enter the Indian market with an ambitious investment proposal to set up a mega factory and export hub for electric cars. The company, led by visionary billionaire Elon Musk, is in talks with the Indian government to establish a manufacturing unit that can produce up to 500,000 electric vehicles per year, starting from Rs 20 lakh.
Tesla has been eyeing the Indian market for a long time, but was deterred by the high import taxes on electric vehicles, which made its cars unaffordable for most Indian consumers. India levies a 60% import tax on electric vehicles priced $40,000 or less, and 100% on those priced above $40,0001. Tesla had written to Indian ministries seeking a reduction in import duties on electric vehicles and had expressed interest in setting up a factory in India if successful with imported vehicles. However, the government had declined to offer any tax waivers for Tesla, saying that it would create an unfair advantage for the company over the domestic players.
But now, it seems that Tesla has found a way to overcome this hurdle and make its presence felt in the Indian market. According to a report by the Times of India, citing government sources, Tesla has submitted an investment proposal to the Indian Commerce and Industry Ministry, which is leading the negotiations with the company. The proposal involves setting up a factory that can produce electric cars for both the domestic and export markets, especially for the Indo-Pacific region. The report also claims that Tesla’s cars will have a starting price of Rs 20 lakh, which is much lower than its current models sold in other countries.
The report further states that Tesla’s proposal is part of a global strategy by companies to diversify their production bases beyond China, where Tesla already has a significant presence, including factories. Tesla is also looking at using India as an export base to ship cars to countries in the Indo-Pacific region, where it sees a huge potential for growth.
The turnaround in Tesla’s plans to invest in India comes within weeks of Elon Musk’s meeting with PM Modi during the latter’s high-profile visit to US last month. Musk had then said that he was a ‘fan of Mr Modi’ and added that the PM had been pushing him to invest in India. “He (Mr Modi) really cares about India because he’s pushing us to make significant investments in India, which is something we intend to do. We are just trying to figure out the right timing … I am confident that Tesla will be in India and will do so as soon as humanly possible,” Musk had said on June 21.
Tesla has officially registered with the Registrar of Companies in India at its Bengaluru branch earlier this year, but there is no set date for when Tesla cars will come to India. However, if the investment proposal gets approved by the government and Tesla manages to set up its factory and export hub in India, it could be a game-changer for the Indian electric vehicle industry and the consumers alike.
Tesla is known for its cutting-edge technology and innovation in electric vehicles, which offer high performance, efficiency, safety, and environmental benefits. Tesla’s cars are also equipped with advanced features such as self-driving capabilities, over-the-air software updates, touchscreen infotainment systems, and futuristic designs. Some of Tesla’s popular models include Model 3, Model S, Model X, Model Y, Cybertruck, and Roadster.
Tesla’s entry into India could also boost the demand for electric vehicles in the country, which is still nascent and faces many challenges such as lack of charging infrastructure, high upfront costs, low awareness, and policy uncertainty. According to a report by BloombergNEF, electric vehicles accounted for only 0.7% of new car sales in India in 2020. However, the report also projects that electric vehicles will make up 28% of new car sales in India by 2030.
Tesla’s investment in India could also create thousands of jobs and spur innovation and competition in the electric vehicle sector. It could also help India achieve its climate goals and reduce its dependence on oil imports. India has set a target of achieving 175 gigawatts of renewable energy capacity by 2022 and 450 gigawatts by 2030. It has also launched various initiatives such as FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme and National Electric Mobility Mission Plan (NEMMP) to promote electric mobility in the country.
I hope this blog post has helped you understand how Tesla plans to set up a mega factory and export hub for electric cars in India. If you have any questions or feedback, please feel free to leave a comment below. Thank you for reading and happy blogging!
