Tesla to manufacture cheapest car in India: Report
The relationship between Tesla and India has apparently progressed over the past few months. After years of back and forth, it seems a Tesla factory in the country could be a reality soon. According to Reuters, the EV maker is planning to build a factory in India to produce an "all-new" car worth $24,000 (around Rs. 20 lakh).
Why does this story matter?
Tesla has tried to enter India's booming auto market multiple times. However, the country's unfavorable stance toward importing vehicles from China prevented its entry. The automaker recently ramped up its efforts to reach an agreement with New Delhi. A cheaper model specifically targeting the Indian market is a testament to Tesla's intent. An Indian entry could also solve the company's supply chain issues.
Tesla representatives to meet with commerce minister
Tesla representatives are reportedly set to meet India's Commerce and Industry Minister, Piyush Goyal, this month to discuss building a new factory. The manufacturing facility would focus on building low-cost vehicles for India and export, Reuters reported. The meeting between Goyal and Tesla representatives would be the highest level of discussion between the two parties since Elon Musk met Prime Minister Narendra Modi.
'All-new' car would be 25% cheaper
The new model Tesla plans to make in India would be 25% cheaper than the Model 3 sedan, its current lowest-priced offering. The latter costs just over $32,000 (roughly Rs. 26 lakh) in China. Moreover, EVs account for less than 2% of India's total vehicle sales. The company would be hoping to penetrate the market with an affordable Tesla.
Tesla has changed previous stance
Tesla's reported decision to set up a plant in India is a sharp reversal from its earlier stance. Since 2019, the company has been pushing the Indian government to cut the high import duties. However, India reportedly refused to offer special treatment to Tesla. The government, on the other hand, has always expressed its interest in having a Tesla manufacturing plant in the country.
Musk's meeting with Modi opened new doors for Tesla
Musk's meeting with Modi in the US last month was probably the catalyst behind the new development. After that, Musk said Tesla will be in India soon. "I am confident Tesla will be in India and will do so as soon as humanly possible," he said. Musk previously mentioned the EV maker could choose a location for a factory in India by 2023 end.
