Tesla eyes investment in India: Plans to set up electric vehicle factory and export hub

Tesla is currently in discussions with the Indian government regarding an investment proposal to establish a factory capable of producing approximately 500,000 electric vehicles on an annual basis, as reported by the Times of India, citing government sources. Led by billionaire Elon Musk, Tesla is also exploring the possibility of utilizing India as a manufacturing hub to export cars to nations in the Indo-Pacific region, according to the same report.

According to the report, the vehicles from Tesla will have a starting price of 2 million rupees ($24,400.66). This price point is more than double the cost of India's most affordable electric vehicle, the MG Comet, and half a million rupees higher than the Tata Nexon EV, which currently holds the position of the highest-selling electric car in the country.

Tesla faced a setback in its plans to enter the Indian market last year when the government declined to reduce import taxes on its vehicles. Currently, the country imposes import taxes as high as 100 percent on electric vehicles, which hindered Tesla's entry into the Indian market.

India expressed a strong interest in Tesla manufacturing vehicles within the country, but the company initially aimed to export its cars to India to assess the demand. However, in a recent shift in strategy, Tesla engaged in discussions with Indian officials in May to explore potential incentives provided by the government for both its cars and battery manufacturing, as reported by Reuters. This indicates renewed efforts by Tesla to enter the domestic Indian market with a different approach.

According to local media reports, the discussions this time are being led by the Indian Commerce and Industry Ministry, which aims to negotiate a mutually beneficial agreement while ensuring a fair competition between local manufacturing and exports. The ministry is working towards assembling a "good deal" that takes into account both aspects of Tesla's involvement in the Indian market.

During a meeting with Elon Musk last month, Indian Prime Minister Narendra Modi urged Tesla to make a "significant investment" in the country. However, Reuters' requests for comments from the Commerce and Industry Ministry, Tesla, and Musk went unanswered at the time of reporting.