"Tesla Eyes Sites for $2-3 Billion Electric Car Plant in India"

According to a report by The Financial Times (FT), Tesla Motors is gearing up to scout potential locations in India this month for its forthcoming electric car manufacturing facility, estimated to require an investment of $2 billion to $3 billion.

This strategic move underscores Tesla's commitment to local production following New Delhi's recent reduction in tariffs on imported electric vehicles (EVs) for companies willing to establish manufacturing operations within the country. Tesla had previously advocated for tariff reductions in EV manufacturing as a condition for investment.

A team from the United States is expected to be dispatched by Tesla by late April to evaluate potential sites, with a focus on regions boasting established automotive hubs such as Maharashtra, Gujarat, and Tamil Nadu. While Haryana is also home to some automakers, Tesla is reportedly prioritizing states with port facilities to facilitate car exports.

The envisioned factory aims to achieve an annual production capacity of up to 500,000 cars at full throttle, with potential plans for a battery plant akin to Tesla's renowned "gigafactories" in other global locations.

Earlier reports by Business Standard indicated Tesla's interest in establishing a factory in India, contingent upon receiving a 15% concessional duty on imported vehicles within the initial two years. Reports suggested that if Tesla were granted a concessional duty for 12,000 vehicles, its investment in India might amount to $500 million, potentially escalating to $2 billion if the concession extended to 30,000 vehicles.

Beyond bolstering local manufacturing capabilities, Tesla's prospective investment in India would represent a significant endorsement for Prime Minister Narendra Modi's government, particularly amidst economic performance and job creation concerns, as highlighted in the FT report.

Elon Musk, CEO of Tesla, had long sought to enter the Indian market, encountering obstacles as New Delhi prioritized nurturing local EV manufacturers, according to a Reuters report. However, recent developments indicate a shift, with PM Modi actively engaging in discussions with Musk and extending invitations to invest, notably during their meeting in the US last year.

BS