KEY HIGHLIGHTS
- States like Tamil Nadu, Maharashtra, and Gujarat are potential locations for Tesla's new plant
- Faces competitive pressures in its primary markets
- Intends to make India a sourcing hub, reducing reliance on Chinese sourcing
Over the past year, the Indian auto market has seen significant growth, making it an appealing destination for investment. Now, it appears that Tesla is also considering tapping into the Indian electric vehicle (EV) market. Reports suggest that Tesla has commenced the production of right-hand drive (RHD) cars at its factory in Germany, with intentions to export them to India later this year. Let's delve deeper into Tesla's plans to understand what they have in store. Meanwhile, you can join our 91Wheels WhatsApp Group community of petrolheads to never miss out on any updates from the automotive world.
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What's Next For Tesla In India's EV Landscape?
Recently, India's new policies supporting electric vehicles (EVs) have caught the attention of major international companies. Specifically, the government has reduced import taxes on certain types of electric vehicles. However, this tax benefit is conditional upon the manufacturers investing a minimum of $500 million in India and beginning production within three years.
However, there's some pushback from local manufacturers like Tata Motors, who are discontent with the government's policy of offering lower tax rates to international investors.
Soon, a team will visit India to scout locations for a new local car manufacturing plant. The investment for this endeavour is estimated to be around $2 billion. Additionally, the company is eyeing investment in a charging network, which will have its separate funding apart from the plant. Moreover, Tesla aims to designate India as its new sourcing hub, intending to reduce its reliance on sourcing from China. The states of Tamil Nadu, Maharashtra, and Gujarat are under consideration for the location of the factory.
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Which Tesla Model Is Coming To India?
It is said that the car Tesla plans to ship to India has already stepped into the production phase in Berlin. However, the specific model that will be introduced to the Indian market remains uncertain. Currently, Tesla manufactures only the Model Y at its factory near Berlin, Germany. Despite this, Tesla's global lineup includes various models such as the Model 3, Model S, Model X, and Model 2, among others.
Tesla has long shown interest in the Indian market, evident from several official visits by company representatives over the past year. Moreover, CEO Elon Musk had a meeting with Prime Minister Narendra Modi in New York last June, indicating the seriousness of Tesla's intentions towards the Indian market.
Why Tesla Is Setting Its Sights On The Indian EV Sector?
Tesla's decision to relocate could stem from various factors. One reason might be the growing auto market in India, which has now secured the third position globally. Additionally, India's efforts to reduce tax rates have made it more appealing to investors. Another factor could be Tesla's performance being impacted in its primary markets of the US and China due to stiff competition, including from Chinese car manufacturers. This competition has led to a decline in Tesla's first-quarter deliveries, which may prompt the company to explore new markets or adjust its strategies.
Verdict
Tesla's arrival in India is expected to have a positive impact on the market, which will be interesting to observe. However, it will undoubtedly raise the competition level for local manufacturers. The outcome of Tesla's venture in India remains to be seen.
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