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India Welcomes Tesla: A New Era for Electric vehicles
Elon Musk, the CEO of Tesla, has recently expressed his excitement for bringing Tesla electric vehicles to India. With India now being the most populous country in the world, Musk believes that Electric cars should be a natural progression for the country. In a recent X Spaces session, Musk stated that “all vehicles will go electric and it is just a matter of time.”
State-of-the-Art Manufacturing Plant in the Works
Tesla has been actively scouting for a suitable location to set up a state-of-the-art manufacturing plant in India. Both the state governments of Maharashtra and Gujarat have extended lucrative land offers to Tesla Inc. for this purpose. The proposed plant, with an estimated investment of USD 2 to 3 billion, aims to cater to both domestic and international markets for Tesla’s electric vehicles.
Government Support for Electric Vehicles
In line with India’s new EV policy, which aims to position the country as a preferred manufacturing destination for electric vehicles equipped with cutting-edge technology, Tesla plans to establish a robust manufacturing presence in India. The policy outlines key objectives such as attracting investments from global EV manufacturers, fostering the adoption of advanced EV technology among Indian consumers, and bolstering the country’s Make in India initiative.
Minimum Investment Threshold and Localization Levels
Under the government’s EV scheme, manufacturers are required to make a minimum investment of Rs 4150 crore (USD 500 million) and achieve significant levels of domestic value addition (DVA). The policy mandates that manufacturers must source at least 25% of the parts used to make the vehicles domestically by the third year of operation, increasing to 50% by the fifth year.
Import Tariff Reduction Scheme
As part of the investment plans, Tesla intends to send a team of experts to scout for suitable locations across India for the proposed manufacturing facility. The government will formally invite applications for the EV tariff reduction scheme, under which eligible companies will be allowed to import up to 8,000 vehicles a year.
Future Plans and Collaboration with India
Elon Musk has previously stated his plans to visit India in 2024 and is confident that Tesla will establish a presence in the country as soon as possible. In a meeting with Prime Minister Narendra Modi, Musk expressed his gratitude for the support and potential collaboration in the future.
Union Minister for Commerce and Industry Piyush Goyal has also visited Tesla’s manufacturing facility in California, highlighting the growing importance of auto component suppliers from India in Tesla’s EV supply chain.
With India’s growing interest in electric vehicles and the government’s support through favorable policies, the future looks bright for Tesla and the electric vehicle market in India. The collaboration between Tesla and India could pave the way for a new era of sustainable transportation in the country.