US electric car manufacturing giant Tesla is ready to make a significant investment towards setting up a local factory in India. This move is part of Tesla’s plan to expand its global footprint and tap into the growing Indian market for electric vehicles. According to the Economic Times, Tesla will invest up to $2 billion. However, the company will only invest this cash if the Indian government cuts the import tariff on its cars to 15% in the first two years of operation.
Reuters reported in August that India was formulating a new electric vehicle policy. This new policy would cut import taxes to as low as 15%. This is quite low compared with the current 100% import tax on cars costing more than $40,000. The other cars costing less than $40,000 have a 70% import tax.
Indian media ET reported that Tesla is willing to invest up to $500 million if the government approves a tariff reduction for 12,000 vehicles. However, this figure will quadruple if it approves a tariff reduction for 30,000 vehicles. The Economic Times said the government is reviewing the feasibility of Tesla’s $2 billion investment proposal. But it hopes Tesla will reduce the number of cars imported with lower tariffs.
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Tesla is considering Maharashtra, Tamil Nadu, and Gujarat as potential locations for its electric vehicle (EV) factory in India. These states already have well-established ecosystems for electric vehicles and exports, making them attractive options for Tesla’s expansion plans.
The Indian government’s push for increasing EVs in the country could lead to a major revenue boost for Tesla, as India’s electric vehicle market is still in its early stages, with battery-powered cars accounting for just 1.3% of the total passenger vehicles sold last year. Tesla’s entry into the Indian market could significantly contribute to the growth of the EV sector in the country.
Tesla’s potential investment of up to $2 billion to build a factory in India reflects the company’s commitment to expanding its global presence and tapping into the growing market for electric vehicles in India. If the Indian government approves the investment proposal, this move could have a significant impact on the development of the EV sector in India and contribute to the country’s efforts to promote sustainable transportation. Tesla’s investment in India has the potential to not only boost the country’s EV industry but also create employment opportunities and contribute to the development of a sustainable transportation ecosystem.