An electrical vehicle of the model Y is pictured throughout the start of the production at Tesla’s “Gigafactory” on March 22, 2022 in Gruenheide, southeast of Berlin. – US electric automotive pioneer Tesla received the go-ahead for its “gigafactory” in Germany on March 4, 2022, paving the way in which for production to start shortly after an approval process dogged by delays and setbacks. (Photo by Patrick Pleul / POOL / AFP) (Photo by PATRICK PLEUL/POOL/AFP via Getty Images)
Patrick Pleul | Afp | Getty Images
Tesla will explore locations in India this month to establish an electrical vehicle factory with an investment of as much as $3 billion, in line with a Financial Times report, in a lift to Prime Minister Narendra Modi’s plans to bolster domestic manufacturing.
The plant could possibly be value $2 billion to $3 billion, FT reported on Wednesday, citing two individuals with knowledge concerning the plans.
The EV maker will deal with the states of Maharashtra, Gujarat and Tamil Nadu that have already got automotive hubs, in line with the report.
Tesla didn’t immediately reply to CNBC’s request for comment.
India last month lowered import tariffs on certain EVs for automakers willing to take a position no less than $500 million and begin domestic manufacturing within the country inside three years.
“The Government of India has approved a scheme to promote India as a producing destination in order that e-vehicles with the most recent technology might be manufactured within the country,” the federal government said last month.
Modi met Tesla CEO Elon Musk in June and invited him to explore investment opportunities in India for electric vehicles.
In 2021, India approved a production linked incentive scheme for automobile and auto components with a budget of 25,938 crore rupees ($3.1 billion) for a period of 5 years, as a part of the federal government’s efforts to spice up domestic production and reduce dependence on imports. The scheme was prolonged by a yr on Jan. 1.
“Tesla is probably the most attractive electric vehicle maker for India because of its large appetite for investment in global expansion appetite and its ability to develop the EV production ecosystems,” Canalys analyst Ashwin Amberkar said earlier this month.
“The brand new Indian EV policy offers increasing incentives, making it a primary opportunity for Tesla to determine a robust position within the country,” said Amberkar.
Tesla is in fierce competition with China’s BYD, which overtook the U.S. EV giant within the fourth quarter of 2023 because the world’s top EV maker, selling more battery-powered vehicles than Tesla. Nevertheless, in the primary quarter of 2024, BYD’s sales dropped below Tesla’s.
The China EV market accounts for nearly 60% of EV sales worldwide. Brands from BYD to Xpeng to Xiaomi have been heating up the market with price wars and latest model launches.