Tesla Motors is set to explore potential sites in India this month for its electric car manufacturing plant, estimated to cost $2 billion to $3 billion, according to a report by The Financial Times (FT).
The move marks a significant step towards local production after New Delhi recently reduced tariffs on imported electric vehicles (EVs) for companies willing to manufacture within the country.
Tesla had earlier advocated for tariff cuts in EV manufacturing, setting this as a prerequisite for investment.
The company plans to dispatch a team from the United States by late April to assess potential locations with established automotive hubs, such as Maharashtra, Gujarat, and Tamil Nadu.
Although Haryana also houses some automakers, Tesla's primary focus is reportedly on states with port facilities, facilitating car exports.
The factory aims to achieve a production capacity of up to 500,000 cars annually at full capacity, with potential plans for a battery plant akin to Tesla's "gigafactories" in other locations.
As earlier reported by Business Standard, Tesla was eyeing to set up a factory in India if it received a 15 per cent concessional duty on imported vehicles in its first two years.
Reports claimed if the EV maker received a concessional duty for 12,000 vehicles, it may invest $500 million in India, however, the investment could go up to $2 billion if the concession extended to 30,000 vehicles.
Aside from boosting manufacturing in India, the investment from Tesla would serve as a significant endorsement for Prime Minister Narendra Modi's government, as economic performance and job creation are key issues, the FT report noted.
Tesla CEO Elon Musk had been trying to enter India for years, but was discouraged as New Delhi was committed to finding local EV manufacturers. according to a report by Reuters. However, over the last year, PM Modi has actively engaged in talks with Musk, inviting him to invest during their meeting in the US last year.
