Tesla to finally enter India by establishing vendor base
Tesla is planning to assemble electric cars in India soon. As per Financial Express, the EV maker has agreed to the government's suggestion "that apart from assembling its electric vehicles in the country, it also set up a vendor base here." The company has been negotiating with the government over the past few years but talks have not yielded much until now.
Why does this story matter?
Tesla has become one of the largest EV makers across the globe. The company has been expanding into newer markets ever since Elon Musk became the CEO in 2008. India is a large and growing market for electric vehicles, and Tesla could potentially sell millions of vehicles in the country over the next few years.
Tesla executives met with Indian officials in May
Top Tesla executives met with Indian officials in Delhi last month to discuss a possible outcome that would be beneficial for both parties. Following the discussion, the EV maker has agreed to the plan to establish a vendor base in India. The government has also said that Tesla can first start with the domestic assembly of cars and later set up a vendor base.
Musk is keen on setting up a base in India
During an interview with the Wall Street Journal, Elon Musk confirmed that he is keen on setting up a base in India. The Indian EV market has seen rapid growth in recent years and there is demand for premium, zero-emission vehicles.
At present, most of Tesla's global production happens in China
In 2021, Tesla went through the homologation process for seven different models and was also ready to launch its Model Y but couldn't convince the government to lower import duties. The government wants Tesla to make in India and not import from China, where the company has established a large vendor base. In China, more than half of Tesla's global production happens.
Government will offer import concessions on components required for assembly
As per the report, the Indian government has asked Tesla to provide a roadmap on the "time-frame needed by it to set up an indigenous supply chain." The company may submit the same in three to six months. Till a vendor base is established, the government is willing to "offer import concessions on the components" required for the local assembly of the cars.
'Tesla will have to indicate time-period for concession'
"The government is willing to give time for setting up a domestic vendor base but Tesla will have to indicate a period by which the duty concessions on components granted to it will come to an end," Indian government officials told Financial Express.
