Tesla Makes a Comeback: In Talks with Indian Government for Plant Setup and Export of Electric Vehicles

  • Tesla renews discussions with Indian government for the establishment of a plant in the country, aiming to produce electric vehicles for both local sales and export.
  • Indian officials and Tesla executives engage in talks regarding potential battery manufacturing plants, local component procurement, and leveraging the local Production Linked Incentive (PLI) system

Following the cancellation of its India debut plans in May 2022, Tesla is allegedly back in talks with the central government about having a presence here, this time suggesting the establishment of a plant in the nation to produce electric vehicles for export as well as local sales.

According to Reuters, citing sources, the US-based automaker met with Indian government officials on May 17.

The proposal comes after India declined to accept Tesla’s request last year to decrease import taxes on automobiles, which may be as high as 100% for CBUs costing more than $40,000. Tesla planned to construct cars in India, but the carmaker decided to test the waters first with imports, so the talks came to a halt.

While Tesla did not propose lowering import tariffs with officials in its most recent meeting, it did suggest creating a factory, without providing information on either the location or the investment, a source in the know told Reuters on condition of anonymity. There was discussion on which models may potentially be supplied in India, as well as the possibility of establishing a battery manufacturing plant in India.

According to the newswire, Tesla executives also met with the authorities about local component procurement, among other things. Tesla allegedly sought advise on how to take advantage of the local Production Linked Incentive (PLI) system. However, Tesla has yet to file a written proposal for the Indian market.

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