Tesla begins scouting sites for India EV factory

Billionaire Elon Musk’s electric vehicle company Tesla is all set to send an executive team to India by late April, with the intent of finalising a location to set up a manufacturing plant worth $2 billion to $3 billion in this country.

The development comes in the wake of India’s decision last month to cut import taxes on electric vehicles that are produced by manufacturers who invest a minimum of $500 million and start domestic production within a period of three years, a report in the UK’s Financial Times said on Wednesday.

Incidentally, Musk had a meeting with Prime Minister Narendra Modi in June last year, and Tesla has been engaged in talks with Indian government officials for some months now.

The Tesla team will arrive from the United States around late April to scout sites where the proposed factory could be set up in India. Reportedly, the focus is on states such as Tamil Nadu, Maharashtra and Gujarat where there is a presence of automotive manufacture hubs.

The electric vehicle (EV) brand has been trying to hit the Indian roads for quite a few years now, but the government is said to have asked for a guarantee that Elon Musk will agree to manufacturing cars in India.

In July last year, Tesla evinced interest in setting up a factory in India for the manufacture of an EV that would cost $24,000. According to Reuters, the automotive company sought that lesser tax be imposed on the more high-end models it sold in the country.

While experts see Tesla’s entry into the Indian market as something that could boost investments in the EV sector, such a move would also profit auto part manufacturers and, importantly, go a long way in curbing vehicular pollution.

The current buzz around Tesla’s possible setting up of a manufacturing plant in India comes at a time when sales of its EVs have seen a slight downward curve, what with competitors emerging in major markets including the United States and China.