UNITED STATES: In a recent interview, Elon Musk, the CEO of Tesla, hinted that India could be on the radar for the electric car manufacturer’s new factory location. While stopping short of making a definitive commitment, Musk expressed his interest in India as a potential contender for Tesla’s expansion plans.
Tesla’s exploration of the Indian market gained momentum after a team from the company visited the country just a week ago. The visit has fueled speculation about the company’s seriousness about establishing a manufacturing presence in India. This speculation is bolstered by the Indian government’s openness to attracting the renowned electric vehicle maker.
Musk stated that the company intends to choose a new location for a new factory by the end of this year. When asked about the most exciting country to build a Tesla plant, he responded, “We did announce that Mexico would be our next location outside the US. We’ll probably pick another location towards the end of this year.” On the subject of India, Musk added, “Absolutely,” affirming India’s potential as an “interesting” contender for expansion.
The Indian government has actively engaged with Tesla, signalling its willingness to support the company’s investment in the country. Executives from the company’s headquarters reportedly held meetings with various government departments, where they were encouraged to consider India as a destination for their investments. Minister of State for IT & Electronics, Rajeev Chandrasekhar, confirmed these discussions and emphasized that India has become a trusted destination for electronics and electric vehicle supply chains.
However, Tesla’s previous attempts to enter the Indian market encountered challenges. Around two years ago, the company conducted detailed market research but ultimately decided against pursuing its plans due to the lack of special incentives from the government.
The company had sought concessions on import duties for introducing its cars directly, but the government referenced local electric vehicle manufacturers like Mercedes-Benz, Tata Motors, and Mahindra & Mahindra, who produce their vehicles domestically.
Another factor contributing to the government’s caution was the concern that Tesla might import cars from its Chinese factory, a scenario seen as unfavourable due to geopolitical tensions. Currently, India imposes high import duties on completely-built cars, with a 100% duty on those valued over $40,000 and a 60% duty on cars costing less.
While Elon Musk’s recent comments have sparked optimism among Tesla enthusiasts in India, it remains to be seen if the company will proceed with establishing a manufacturing presence in the country. The government’s support and willingness to engage with Tesla may indicate a more favourable environment for the company this time around. As Tesla weighs its options, India eagerly awaits a potential collaboration that could shape the future of electric vehicles in the country.
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