Tesla: Elon Musk’s India deal likely during Vibrant Gujarat Summit in Jan’ 24
Virendra Pandit
New Delhi: Elon Musk, the world’s wealthiest man, is likely to sign his Tesla Inc. deal with India in January 2024 during the upcoming Vibrant Gujarat Global Summit in Prime Minister Narendra Modi’s home state.
According to reports, Tesla and India, engaged in the matter for quite some time, now appear to be closer to an agreement, facilitating the import of the automaker’s electric cars simultaneously as it sets up a manufacturing facility in the country within two years.
An announcement in this regard is likely next month.
Besides Gujarat, the other places being considered for the Tesla plant are Maharashtra and Tamil Nadu which both already have ecosystems for making electric vehicles and exports, the media reported.
To start with, Tesla might commit an initial investment of nearly USD 2 billion and buy India-made auto parts worth USD 15 billion, besides manufacturing batteries in India.
Tesla CEO Elon Musk, who met PM Modi in the US in June, said his EV company planned to make a “significant investment” in India which he intended to visit in 2024. Currently, Tesla has factories in the US, China and Germany.
India, the world’s largest hydrocarbon importer, has long been pushing to increase domestic manufacturing of EVs and encourage a more rapid adoption of cleaner transport.
At present, battery-powered cars in India account for just 1.3 percent of the total passenger vehicles sold last year, due mainly to buyers’ hesitance to switch to electric cars because of high upfront costs and a dearth of charging stations.
Because of the high import tariffs, Tesla’s EVs are expensive in India and imported indirectly. However, if it makes EVs indigenously, the costs may come down to around Rs. 16 lakhs.
Union Minister for Commerce and Industry Piyush Goyal, who visited Tesla’s plant in Fremont, California, this month, said in September in New Delhi that Tesla is planning to almost double purchases of auto parts from India to USD 1.9 billion by March 2024, as against USD1 billion last financial year.
Following a year-long impasse, Tesla and India, which is the world’s third-largest automobile market, reopened dialogue in May 2024. Musk had criticized India’s high import taxes and its EV policies. India, in turn, advised Tesla not to sell China-manufactured cars in the country.
India may now lower import duties for international EV manufacturers for five years if they eventually commit to setting up local factories.
