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Business News/ Auto News / Tesla gets ready to import German-made EVs to India
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Tesla gets ready to import German-made EVs to India

The company will continue to evaluate exports from Shanghai as well

Tesla reported first quarter (March quarter) deliveries at 386,800 units, down 8% on a year-on-year basis, below street estimates. (Photo: AP)Premium
Tesla reported first quarter (March quarter) deliveries at 386,800 units, down 8% on a year-on-year basis, below street estimates. (Photo: AP)

New Delhi: It’s Berlin, not Shanghai. The German capital is where American electric vehicle (EV) maker Tesla is likely to import cars into India from, even as the Centre's new electric vehicle policy clears the way for its much-awaited entry into India, according to people aware of the matter. They added, however, that the company will continue to evaluate exports from Shanghai as well.

Mint was the first to report last July that Tesla executives in their meetings with the ministries of heavy industries and commerce had discussed importing EVs from its Berlin gigafactory for the Indian market, as opposed to Shanghai, which is its main export base.

The government plans to open the application process for its new EV policy, as well as publish detailed guidelines under it, in a span of 60-70 days from now, even though the policy stipulates for applications to start within 120 days of the policy announcement, which took place on 14 March, the people cited above said on condition of anonymity.

The policy will not have any preferred destination for the source country of imports, the people added.

On Thursday, Reuters reported that Tesla has started production of right-hand drive models at its Berlin factory, one out of its four giga facilities, for export to India in the second half of this year. Tesla has also reportedly revived its discussions to scout for a suitable location for an Indian manufacturing facility.

In a gazette notification last month, the Centre said it will allow automakers to import up to 8,000 EVs priced $35,000 or higher every year at a reduced import duty of 15%, from 70% earlier, if they commit to investing at least $500 million in India over the next three years.

They will also have to begin local manufacturing operations and ensure 50% domestic value addition (DVA) in the vehicles manufactured here by the end of that period, increasing it to 50% at the end of the five years. The scheme will be administered by the ministry of heavy industries.

While Tesla was negotiating for the duty reduction to be available for an affordable $25,000 EV that it is planning to develop for markets like India, it will now likely bring its Model 3, which sells at close to $40,000 globally, or Model Y, which sells for close to $45,000 ex-showroom in the US, to India. It will also work towards localizing its operations to kickstart its India entry plans, the people cited above said.

Tesla’s manufacturing units are highly integrated, and the company manufactures most critical parts for its cars in-house, which is very different to assembly operations.

Tesla reported first quarter (March quarter) deliveries at 386,800 units, down 8% on a year-on-year basis, below street estimates.

Tesla’s Shanghai gigafactory is its main export hub and its largest factory, and ships units to Thailand and Singapore, and will soon add Malaysia to its export destinations, where it faces stiff competition from Chinese rival BYD, which leads the nascent EV market in the country, even outnumbering Japanese peers.

Tesla prefers to export its cars to Asian markets in view of the low sales volumes. That apart, the 750,000-unit gigafactory in Shanghai rolls out enough Model 3 and Model Y to serve neighbouring export markets.

Apart from Berlin and Shanghai, Tesla’s other two gigafactories are in the US, in California and Nevada.

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ABOUT THE AUTHOR
Alisha Sachdev
Alisha Sachdev reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies.
Catch all the Auto News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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Published: 04 Apr 2024, 08:43 PM IST
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