Tesla likely to set up first Indian factory in Gujarat
What's the story
Tesla is expected to reveal its plans for an Indian plant at the Vibrant Gujarat Summit in January, with CEO Elon Musk in attendance, as reported by the Ahmedabad Mirror. Gujarat is seen as an ideal location for Tesla's export-focused strategy, catering to both domestic and international markets. Gujarat government spokesperson Rushikesh Patel expressed hope that Elon Musk would choose Gujarat for investment, highlighting the government's supportive attitude, reported ANI.
Details
Gujarat government optimistic about Tesla investment
Previously, Tesla had been considering Gujarat, Maharashtra, and Tamil Nadu due to their well-developed ecosystems for electric vehicles and exports. Currently, Tesla does not import cars directly into India because of high tariffs, and the Indian government has no plans to offer subsidies on import duty for electric vehicles. Tesla was all set to invest around $2 billion in making a factory in India if the government granted a concessional duty of 15% during its first two years of operation.
What Next?
Tesla's proposed investment and impact on Indian market
The company aims to localize up to 20% of the value of made-in-India cars within two years, increasing to around 40% in four years. With concessional import duty, prices of Tesla's Model 3 and Model Y could be around Rs. 38 lakh and Rs. 43 lakh, respectively. Bloomberg reported that Tesla might initially commit to a minimum investment of $2 billion and increase purchases of auto parts from India to as much as $15 billion.