Tesla is reportedly in advanced talks to enter the Indian market and may invest nearly $30 billion over the next five years.
Tesla and SpaceX’s CEO Elon Musk
As India moves closer to drafting a new electric vehicles (EV) policy, Tesla is in advanced talks to make an entry into the country and may be open to committing nearly $30 billion in investments, directly and indirectly, over the next five years in a manufacturing plant, and battery ecosystem and ancillary industries, people closely involved with the company’s official business plans said.
This may include a direct and immediate investment of $3 billion to produce a new small car from an Indian plant for the wider developing world, a $10 billion commitment from other partners to support this manufacturing venture, and a cumulative $15 billion in the battery industry ecosystem over a five-year period, the people added.
If the new policy on electric cars – which is broader and not Tesla-specific – fulfills Tesla’s request to reduce import taxes on foreign electric cars under the current structure, the company plans to first import a limited number of its standard brands to compete in the Indian . luxury car market, starting to build and test a charging ecosystem. At the same time, Tesla may also invest in a factory in India to introduce the first small car in two years, and the facility will be completed within three years. The price structure of the car was not specified, but it is likely to be a cheaper model than regular Teslas to meet the demands of Asian, African and Latin American countries.
The factory, with its rich local Indian content, can partially serve the Indian market and focus mainly on exports, the people cited above said.“If successful, this will be the largest foreign direct investment in India. Tesla is investing $3 billion in the factory, and other partners in its manufacturing ecosystem are investing an additional $10 billion. At the same time, another $5 billion will be invested in batteries, increasing to $15 billion. In total, we are looking at $30 billion,” said a person close to the company involved in project discussions.The person added that this could very well be a “Suzuki moment” for India’s electric car industry — referring to how Maruti-Suzuki led the small car revolution in the 1980s — and “Apple plus moment” for India’s manufacturing operations. . Apple recently started manufacturing in India. “But unlike Apple, Tesla brings everything at once. Don’t think of Tesla as just a car company. It is a technology company. It is a critical mining and refining company. He makes his own semiconductors. It is a design company. This leads to a huge ecosystem.
The spillover to other industries is huge.”Also read: Elon Muskand#039;s X lays off 1,000 employees from anti-cyber-hate teamTesla has not officially commented on its specific plans for India. While a senior government official. in the India’s finance ministry did not comment specifically on Tesla’s case, he said, “India is considering giving an incentive to all EV players. Company-specific incentives are not provided in any sector. But it shows that imposing import tariffs as part of a broader policy is still on the table.The Ministry of Road Transport and Highways launched the EV30@2030 campaign, which aims to ensure that 30% of new passenger cars, 40% of buses, 70% of commercial vehicles and 80% of 2- and 3-wheeled vehicles. -bikes will be electric by 2030.
The official said that while there is no unified policy on electric vehicles in India, the government’s “various policy measures and support measures” have shown a strong commitment to promote the adoption of electric vehicles in the country.Like other major American companies, Tesla’s plans in India are part of a broader strategy to diversify outside of China. While Tesla continues to explore other Asian countries as potential production sites, people familiar with the company’s thinking said Tesla founder Elon Musk admires both India and Prime Minister Narendra Modi, whom he met in New York last June, and remains committed to expansion. . Tesla presence in India. “Musk really admires what Modi has done for India and his energy.
He told Modi about his interest in spirituality and meditation in India and expressed interest in traveling there,” said the person familiar with Tesla’s thinking above.In India, Tesla is considering setting up four major car manufacturing centers at its plant – Haryana (which will help serve the largest market in NCR), Tamil Nadu, Maharashtra and Gujarat. But considering the large export plans, it is likely that if Tesla invests, it could choose a coastal country in the west or the south.Tesla’s manufacturing module is based on high local content, and partners point out that its Berlin factory has a higher local content of Tesla’s electric cars than Germany’s Mercedes, while in Shanghai. , its localization rate is 95%.Tesla’s investment, according to the project’s proponents, will help meet several of India’s goals in local manufacturing, combating the climate crisis, integrating into new global supply chains and a broader strategic partnership between India and the United States..
