NEW DELHI, 28 July 2023: Tesla Inc is reportedly planning to build a factory in India to produce a new and affordable electric car priced at USD 24,000. Representatives from Tesla are scheduled to meet with India’s commerce minister this month to discuss this proposal, signaling a significant investment in the country’s electric vehicle (EV) market, according to a media report.
Tesla’s Interest in Indian Market
Tesla has expressed interest in establishing a manufacturing base in India to produce low-cost EVs for the local market as well as for export. The company aims to make its EVs more accessible to Indian consumers by offering a vehicle 25% cheaper than its current lowest-priced model, the Model 3 sedan. This move comes after previous efforts to reduce import taxes on EVs faced obstacles due to the government’s insistence on local manufacturing commitments.
Tesla’s Target Price and Growth Prospects in India
The new Tesla vehicle, priced at USD 24,000, is expected to be a game-changer in India’s EV market. At present, electric vehicles represent less than 2% of total vehicle sales in India, despite being the world’s third-largest auto market. The Indian government’s push towards electric mobility and Tesla’s entry into the local production sphere could significantly boost EV adoption in the country.
High-Level Discussions and Planned Investments
The meeting with India’s commerce minister represents the highest level of discussions between Tesla and the Indian government since Elon Musk’s meeting with Prime Minister Narendra Modi in June. The company is looking to engage in discussions regarding setting up an EV supply chain and securing land for the factory.
Tesla’s Global Expansion Strategy
Tesla’s aggressive pricing strategy and plans to reduce production costs by 50% through its next-generation vehicle platform show its commitment to making EVs more affordable and widespread. The company already has manufacturing facilities in California, Texas, Berlin, and Shanghai, with the latter being the largest, accounting for nearly 40% of Tesla’s global capacity.
India’s Potential as an EV Market
With India’s rapidly growing automobile market and the government’s push for electric mobility, the country presents immense potential for Tesla’s expansion plans. By producing affordable EVs locally, Tesla can tap into the rising demand for eco-friendly and cost-effective transportation solutions.
Tesla’s intention to build an affordable electric car factory in India marks a significant development in the country’s EV market. The meeting with the commerce minister and discussions on local production demonstrate Tesla’s commitment to the Indian market. If successful, Tesla’s investment in India could not only boost EV sales in the country but also position India as a potential global hub for EV manufacturing and supply.