Tesla will send a team from the United States to India by the end of April to study the location of a proposed electric vehicle factory worth US$2 billion to US$3 billion (approximately Rs 16,691 crore to Rs 25,036 crore), the Financial Times reported on Wednesday, citing people familiar with the matter.
The company’s move into India reportedly comes as demand for electric vehicles is slowing in key markets such as the United States and China, where competition is intensifying. That led Tesla to report lower first-quarter deliveries than expected.
Reports say the electric car maker will focus on states in India that have automotive hubs such as Maharashtra, Gujarat and Tamil Nadu.
Tesla did not immediately respond to Reuters’ request for comment.
India last month reduced import taxes on certain electric vehicles produced by automakers that have pledged to invest at least $500 million (about Rs 4,172 crore) and start domestic production within three years, a move seen as supporting Tesla’s market plans.
The company has been trying to enter India for years, but New Delhi wants to focus on local manufacturing.
India’s small but growing EV market is dominated by domestic automaker Tata Motors. Electric vehicles will account for about 2% of total car sales in India by 2023, and the government aims to reach 30% by 2030.
Analysts say Tesla’s entry into the Indian market could spur more investment in electric vehicles and benefit local auto parts makers.
Tesla officials have been in talks with government officials over the last year, and Musk met with Indian Prime Minister Narendra Modi in June.
The company said in July last year that it was interested in setting up a factory in India to produce electric cars priced at $24,000 (Rs 20 lakh). The company has also called for lower taxes on more expensive models it hopes to sell in India, Reuters reported.
© Thomson Reuters 2024
