Why Elon Musk’s Tesla Coming to India? All You Need to Know

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Tesla Inc has reportedly suggested establishing a factory in India to produce electric vehicles for both domestic and export markets. According to media reports, the manufacturer informed government officials on Wednesday.

Tesla executives are in India on May 17 and 18 to meet with Indian government authorities to address topics such as local procurement of parts, among other things. The idea comes after India declined to accede to Tesla’s request last year to cut the import duty on automobiles, which may approach 100%.

While India wants the manufacturer to build vehicles locally, Tesla wants to test the market first with imports, and the discussions have come to a halt.

Tesla, according to the reports, did not discuss lower import duties with Indian officials. According to the source, it just recommended establishing a new factory, without naming a location or funding.

Making vehicles in India meshes with Indian Prime Minister Narendra Modi’s “Make in India” drive to attract corporations, especially as companies strive to diversify their supply chains outside China. Tesla met with officials from Prime Minister Narendra Modi’s office and other ministries on Wednesday. The meeting takes place just weeks before Modi’s June visit to the United States.

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The electric carmaker’s fresh interest in India comes nearly a year after it put plans to sell cars in the country on hold due to a failure to achieve lower import duties, which Tesla CEO Elon Musk described as “among the highest in the world.”

Tesla had employed a local team and started looking for showroom space last year, but that was also abandoned.

What Did Musk to Say?

The Tesla CEO emphasized that he is a “fan” of Prime Minister Modi and recalled the Prime Minister’s visit to the Tesla factory in California in 2015. “We’ve known one other for a long time. I am quite optimistic about India’s future. “I believe India holds more promise than any other large country in the world.”

In response to a particular question about the timing for Tesla’s arrival in India, he stated, “I am confident Tesla will be in India and will do so as soon as humanly possible.” Prime Minister Modi genuinely cares about India since he is pressuring us to spend significantly in India, which is something we frequently do. We only need to figure out the best time.”

Why Tesla Must Act Quickly

Musk must establish a production facility as soon as possible in order to accomplish Tesla’s objective of selling 20 million electric vehicles per year beginning in 2030. The aim is a significant increase from the company’s current annual production of 1.3 automobiles, needing a significant increase in production facilities. Meanwhile, competitors such as Mercedes-Benz, BMW, and Volkswagen are catching up in the race to develop electric vehicles.

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Tesla now has six manufacturing plants, four of which are in the United States. It has two Gigafactories in Shanghai and Berlin that can produce automobiles and batteries. The business has chosen Mexico as the location for a new Gigafactory.

Tesla’s Demand and India’s Challenges

Tesla vehicles are notable for their aerodynamics, simple aesthetics, and high-end technologies like as Autopilot, which allows a car to automatically steer, accelerate, and break within its lane.

The electric car business in India is quickly expanding as a result of the government’s clean energy push. Tata Motors now dominates auto sales in this segment, with inexpensive electric vehicles available at multiple price ranges below 20 lakh.

In a price-sensitive country like India, Tesla’s chances will be determined by how competitively it can sell its vehicles while providing customers with a portion of its cutting-edge experience.

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