Tesla to scout site for $2-3bn India manufacturing plant: Report

Gajanan Kashikar Updated: April 05, 2024, 11:15 AM IST

Tesla, led by billionaire Elon Musk, is exploring opportunities in India, with plans to establish a $2 billion to $3 billion electric car plant. According to Financial Times, a team from Tesla will visit India this month to scout locations for the proposed plant. Meanwhile, India recently announced a reduction in import taxes on certain electric vehicles manufactured by companies committing to invest at least Rs 4,150 crore within three years to start commercial production.

Sources familiar with the matter revealed that Tesla plans to send a team from the United States by late April to assess potential sites for the plant, focusing on states, such as Maharashtra, Gujarat, and Tamil Nadu thanks to their proximity to ports facilitating car exports.

Elon Musk has been attempting to enter the Indian market for some time, with the Indian government seeking a commitment to local manufacturing as a prerequisite. Tesla officials have engaged in discussions with government officials over the past year, including a meeting between Musk and Prime Minister Narendra Modi in June.

Under the EV policy, companies must achieve localisation levels of 25 per cent by the third year and 50 per cent by the fifth year to qualify for the lower custom duty on Completely Built Units (CBUs). This policy applies to cars priced at a minimum value of $35,000 (around Rs 29 lakh), including cost, insurance, and freight charges.

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