Secret revealed: India-Tesla comes closer in agreement, India to invest $2 billion

The US automaker Tesla Inc. is reportedly close to reaching an agreement with India that would allow it to import its

electric cars

A participant, who wished to remain anonymous due to the confidential nature of the discussions, proposed that a declaration may be made during the Vibrant Gujarat Global Summit in January. According to a different source, these regions are being investigated as they have established ecosystems for the export and sale of

electric vehicles

According to one source, Tesla plans to invest a minimum of $2 billion in its plants initially and aims to boost its procurement of auto components from the country to as much as $15 billion. The source claims that the US firm would also like to save expenses by manufacturing certain batteries in India. 

The individuals said that plans are subject to change and that no choices have been made in stone. Tesla's CEO, Elon Musk, said in June that the business will be making a "significant investment" in India and that he planned to visit the country in 2024.

Representatives from the nation's ministries of finance, trade, and industry as well as the Ministry of Heavy Industries, which oversees the auto sector, did not respond to requests for comments. Furthermore, Tesla did not respond to a request for comments.

It would be beneficial for Tesla, which presently has plants in the US, China, and Germany, to expand into the most populated country in the world. There, aspiring middle-class consumers are driving an increasing number of electric vehicles. The Modi administration has been working to promote the quicker uptake of greener mobility and boost domestic EV production.

Despite these initiatives, India's EV sector hasn't taken off; according to BloombergNEF, only 1.3% of all passenger vehicles sold last year were battery-powered automobiles. Due to the high initial cost of electric automobiles and the scarcity of charging facilities, buyers are unwilling to switch.

Tesla avoids importing vehicles into India directly due to the substantial levies imposed. Some of the participants stated that when the first locally produced automobiles are put up for sale, their retail prices may be as low as $20,000.

Trade Minister Piyush Goyal stated in September that Tesla plans to almost double its imports of car components from India to $1.9 billion this year during a visit to the company's Fremont, California, factory earlier this month. Speaking at an event in New Delhi, he revealed that the electric car maker imported $1 billion worth of parts from the nation the year before.

Tesla and India, the world's third-largest auto market, reopened negotiations in May following a year-long impasse. After Musk criticised India for its high import taxes and electric vehicle (EV) regulations, the nation told Tesla not to sell cars made in its political rival, China.

Recent sources state that if global electric car manufacturers agree to create local manufacturing facilities, India may lower import charges for them for a period of five years.