Tesla officials should visit India in April to examine the business operations and engage with the main government services, including the Prime Minister’s office (PMO), the Ministry of Heavy Industries, the Ministry of Road Transport And Highways (Mort) and the Ministry of Commerce, sources said in Business Today.
Tesla has identified the Maharashtra Sambhaji Nagar Chakan and Sambhaji, as well as Gujarat, as preferred locations for its manufacturing center. The company should make an initial investment of 3 to 5 billion dollars to establish its production facilities, added the source.
Tesla must apply for the EV manufacturing scheme
To take advantage of the drop in import duties and government incentives, Tesla will have to request the promotion program for the manufacture of electricity cars in India (SPMEPCI). The policy, informed on March 15, 2024, aims to stimulate the local production of electric vehicles.
As part of this scheme, manufacturers are required to:
- Invest a minimum of Rs 4,150 Croore in India
- Reach at least 25% interior value (DVA) by the third year
- Increase the DVA to 50% by the fifth year
“If Tesla wants to benefit from lower import rights, he will have to engage in manufacturing in India and invest in the local supply chain,” said another source.
In 2023, Tesla managers engaged in the Modi administration to discuss the local supply of components, which led to the company to obtain offices in Pune. Subsequent meetings between Elon Musk and Prime Minister Modi have further fueled speculation on Tesla’s entry into India.
In 2024, India introduced a revised VE policy that offers import rights to manufacturers committing at least $ 500 million in local investments. Musk was originally to announce Tesla’s investment plans during his visit scheduled for April 2024 in India. However, he canceled the trip due to urgent business issues and rather went to China.
While the India electric vehicle market remains relatively low compared to China – where 11 million electric cars were sold last year – it is developing gradually. On the other hand, sales of electric vehicles from India amounted to nearly 100,000 units during the same period. Despite this gap, Tesla considers India as a high potential market, given the government’s pressure for clean energy and the incentives to accelerate the adoption of the VE.
