Tesla to establish EV plant in India with $3bn investment
To establish an electric vehicle plant in India with an investment of $3bn, Tesla is reported to explore Indian places this month, Financial Times reported. The move supports Prime Minister Narendra Modi's efforts to increase local manufacturing.
Citing two sources with knowledge of the project, FT reported on Wednesday that the plant's estimated value ranged from $2 billion to $3 billion.
The report further said that the EV manufacturer would concentrate on the states of Tamil Nadu, Gujarat, and Maharashtra which currently have automotive centres.
India reduced import taxes on certain electric vehicles (EVs) this month for manufacturers that agreed to invest $500 million or more and begin producing the vehicles domestically in India within three years.
"In order to facilitate the production of high-tech e-vehicles in India, the government has approved a scheme to promote India as a manufacturing destination," the government said last month.
In June, Modi asked Elon Musk, the CEO of Tesla, to visit India to discuss potential investment prospects in electric car technology.
In an attempt to increase domestic manufacturing and lessen reliance on imports, the Indian government authorised an output-linked incentive plan for automobiles and auto components in 2021. The initiative has a budget of 25,938 crore rupees ($3.1 billion) and is set to run for five years. On January 1, the programme was extended by one year.
According to Ashwin Amberkar, a Canalys analyst, earlier this month, "Tesla is the most attractive electric vehicle maker for India due to its large appetite for investment in global expansion appetite and its ability to develop the EV production ecosystems." He further said, "Tesla has a great opportunity to establish a strong position in the country as the new Indian EV policy offers increasing incentives."
China's BYD, which sold more battery-powered vehicles than Tesla in the fourth quarter of 2023, surpassed the American EV giant as the world's leading EV manufacturer, putting Tesla in a serious challenge. However, in 2024's first quarter, BYD's sales fell short of Tesla's sales.
Worldwide EV sales are roughly 60% driven by the Chinese market. Brands such as Xiaomi, Xpeng, and BYD have been energising the market with their new model releases and pricing battles.