Elon Musk terms Tesla's entry into India as 'natural progression'
Elon Musk, the CEO of Tesla, has characterized his electric vehicle (EV) company's foray into the Indian market as a "natural progression." In a conversation with Nicolai Tangen, CEO of Norges Bank Investment Management, at an X Spaces session, Musk emphasized that India deserves to have EVs on par with other nations. "It's a natural progression to provide Tesla electric vehicles in India," stated Musk.
Tesla eyes India for future electric vehicle manufacturing
Musk also expressed his conviction that all vehicles will eventually become electric, stating it's just a matter of time. In line with this vision, Tesla has been actively scouting potential locations in India for a state-of-the-art manufacturing plant. The governments of Gujarat and Maharashtra have offered attractive land parcels to Tesla to facilitate this endeavor.
Tesla's proposed manufacturing plant aligns with India's EV policy
The proposed manufacturing plant, estimated to cost between $2 billion and $3 billion, will cater to both domestic as well as overseas markets for Tesla's electric vehicles. This initiative aligns with India's new EV policy which encourages the establishment of manufacturing plants in the country. The policy promotes manufacturers to hit significant levels of domestic value addition (DVA) and meet a minimum investment threshold of ₹4,150 crore.
India's EV policy encourages domestic sourcing and investment
India's EV policy stipulates that by year three of setting up the manufacturing unit, at least 25% of the parts used to make the vehicles should be sourced domestically. This localization level should increase to 50% by year five of the operation. Manufacturers who establish factories in India inside three years, will be subject to a 15% customs duty for five years on vehicles costing $35,000 or more.
