Tesla “Exploring the Potential Impact of Tesla’s Entry into the Indian Electric Vehicle Market”

Tesla, the prominent electric vehicle manufacturer, is reportedly sending a team to explore potential locations in India this month for a fruitful investment ranging from $2 billion to $3 billion in establishing an electric car plant, per sources cited by the Financial Times. This initiative comes in the wake of New Delhi’s recent tariff reduction on imported electric vehicles (EVs) with higher price tags, provided companies commit to domestic production within three years. According to the FT, the scouting team, expected to arrive from the US by late April, will focus primarily on states with well-established automotive clusters, such as Maharashtra, Gujarat, and Tamil Nadu. While Haryana, adjacent to New Delhi, could also be considered, the emphasis is on states with port infrastructure, facilitating smoother car exports.

If materialized, Tesla’s investment could significantly boost Prime Minister Narendra Modi’s government, particularly as the country approaches parliamentary elections. During their meeting in the US last year, Prime Minister Modi had encouraged Tesla CEO Elon Musk to invest in India. Tesla was reportedly in advanced discussions to enter the Indian market and potentially invest around $30 billion over the next five years. Additionally, Tesla might explore establishing a battery plant in India, following its “giga-factory” model observed in California, Texas, Berlin, and Shanghai. A source close to the company, engaged in discussions on the project, suggested that this endeavor could mark a pivotal moment for India’s EV industry, akin to Suzuki’s impact, and represent an “Apple plus moment” for India’s manufacturing aspirations. India has allocated substantial subsidies to bolster manufacturing, particularly in critical sectors like EVs, aiming to bridge the gap with China in this field.