India is on the verge of finalising a deal with Tesla Inc., the American automaker, which would permit the company to import its electric vehicles into the country starting next year and establish a manufacturing plant within a span of two years, according to a report by Bloomberg citing sources who are privy to the Indian government’s plans.
The official announcement is expected to be made at the Vibrant Gujarat Global Summit in January, as per one of the sources.
The states of Gujarat, Maharashtra, and Tamil Nadu are being considered for this venture, given their well-established infrastructure.
The report suggests that Tesla is planning to invest around $2 billion initially in a new plant in India.
They also plan to buy auto parts from India worth up to $15 billion. The company is considering making some batteries in India to reduce costs.
However, these plans are not final and could change. Tesla’s CEO, Elon Musk, mentioned in June that Tesla intends to make a “significant investment” in India and he plans to visit in 2024. So far, there has been no official comment regarding the same.
Electric cars made up only 1.3% of all passenger vehicles sold last year. This is because electric cars are expensive and there aren’t many charging stations.
Tesla doesn’t currently import cars directly into India because of high tariffs. But when its first locally made cars go on sale, they could cost as little as $20,000.
Last week, Union Minister Piyush Goyal visited the Tesla factory in Fremont, where the elected representative was scheduled to meet Elon Musk.
However, the meeting couldn’t happen due to Musk’s health but the billionaire promised to meet the minister soon.
Goyal met the top leadership from India including researchers and engineers from India at the Tesla factory.