Tesla's India launch imminent, but no local manufacturing plans yet
What's the story
Tesla, the global electric vehicle (EV) giant led by Elon Musk, will be entering the Indian market in the next few months.
However, unlike the previous speculations, the company won't be setting up a local manufacturing facility right away.
Instead, Tesla plans to import its vehicles directly and gradually increase local sourcing of components and spares.
This was confirmed by government officials familiar with Tesla's entry plan into India, as reported by Moneycontrol.
Market entry
Tesla's initial operations and government's integration strategy
As part of its first operations, Tesla plans to set up flagship outlets in Delhi and Mumbai.
The company has already posted 13 job openings in suburban Mumbai for customer-facing and backend roles, signaling an imminent launch.
The Indian government, on the other hand, is more interested in bringing India into Tesla's global value chain (GVC) than pushing the EV giant for immediate local manufacturing commitments.
Policy shift
Government considers import duty relief for EVs
The Indian government is also considering additional import duty relief for EVs, indicating a wider relaxation of import norms for EV makers.
This possible policy shift is aimed at attracting foreign players and strengthening India's position in the global supply chain.
The Basic Customs Duty (BCD) on fully built EVs costing over $40,000 has been lowered to 70%, but an extra 40% Agriculture Infrastructure and Development Cess (AIDC) has been imposed.
Scheme exclusion
Tesla's India operations won't benefit from SPMEPCI scheme
Tesla's India operations won't fall under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI).
This scheme provides lower duties to car makers promising domestic manufacturing. However, as Tesla hasn't made such a promise yet, it will begin with imports and eventually look at local sourcing.
The focus now seems to be on bringing India into Tesla's global operations by promoting domestic production of components, spares.
Store locations
Tesla in talks for flagship stores in Mumbai, Delhi
Tesla's proposed outlets in Mumbai and Delhi will officially mark its entry into India.
The company is said to be negotiating to open a 5,000 sq. ft. showroom at Bandra Kurla Complex (BKC) in Mumbai and at Aerocity in Delhi for its flagship store.
These developments pave the way for a gradual engagement with buyers and the automotive ecosystem as Tesla gears up to launch its EVs on Indian roads.