American electric car manufacturer Inc, has come forward and engaged in discussions with Indian officials exploring the potential of domestic incentives for electric car and battery manufacturers. The talks signal a renewed interest from Tesla in entering the Indian market. Sources with direct knowledge of the matter have confirmed the discussions, shedding light on the automaker’s plans.
According to these sources, Tesla has proposed the establishment of a factory in India dedicated to the production of electric vehicles (). In addition, there have been discussions surrounding the local manufacturing of EV batteries. The talks indicate Tesla’s intention to gain insights into the local policies and regulations before making any definitive decisions. However, as the discussions are of a private nature, the sources preferred to remain anonymous. Tesla has not yet responded to requests for comment as reported by Reuters.
This recent shift in stance signifies a change in Tesla’s approach. In the past, the company primarily focused on securing lower import taxes on vehicles, as high as 100 percent, which led to a deadlock in negotiations with the Indian government.
Previously India had expressed its desire for Tesla to manufacture vehicles within the country, however the company had argued in favor of testing demand through exports before committing to local production without complying with existing import duties. This eventually resulted in the company exiting the Indian market last year.
The sources suggest that the recent discussions have not only touched upon India’s taxes on imported vehicles but have primarily revolved around how Tesla could leverage the government’s incentive program. Under this scheme, which has allocated approximately $6 Billion, automakers and battery manufacturers can receive cashback incentives for selling and exporting domestically produced vehicles and parts.
Commenting on this recent development Mohan Shukla, an expert from New Delhi-based public policy advisory firm White Dolphin Media, said, “It appears Tesla has come with a different heart and head this time to take advantage of the auto boom (in India)…Tesla can negotiate on things like taxes better if it first sets up a plant.”
Outside of the United States, Tesla currently operates its largest factory in Shanghai, China, and has a plant in Brandenburg, Germany. With India being the world’s third-largest automobile market, the Indian government has set an ambitious target of achieving a 30 percent share of EVs in total car sales by 2030, up from the current 1 percent.
After exiting the Indian market last year Tesla has reconsidered its interest in the Indian market. This renewed interest in India, demonstrated by its engagement in talks regarding incentives and battery manufacturing, signifies the potential for further expansion in the booming Indian automotive industry. As the discussions progress, it remains to be seen how Tesla’s plans will align with the government’s EV goals and regulations, ultimately shaping the company’s future in this promising market.
(With inputs from Reuters)
