Elon Musk-led US electric car maker Tesla is reportedly looking to make a $2 Bn investment in India for setting up a local factory in the country, only if the government approves a concessional duty of 15% on its imported vehicles during the first two years.
Tesla has approached the government with a detailed proposal, reflecting the link between the quantum of investment to the number of cars it can import at lower duty.
According to an Economic Times report, the company may be willing to invest up to $500 Mn, if India extends a concession on tariff for 12,000 cars, and may increase the investment to $2 Bn if the concession is applied for 30,000 cars.
Tesla also said that it may commit to localise up to 20% of the value of made-in-India cars in 2 years and increase that to 40% in 4 years.
Government officials are examining the proposal’s viability of the upper limit of $2 Bn. Also, government officials aware of the matter said that it is considering a reduction in the number of cars mentioned in the proposal for concession, and considering whether a concessional tariff can be imposed on 10% of the total EVs projected to be sold in India during this financial year, and can be increased by 20% for the next fiscal.
According to the government, around 50,000 EVs were sold in FY23 which is expected to go up to 1,00,000 units by the end of FY24.
Previously, the EV giant and the government were reported to be closing agreement soon to start the operation of Tesla in India 2024 onwards. Though further details of the deal were not disclosed, the final announcement is likely to be made at the upcoming Vibrant Gujarat Global Summit in January 2024.
Reportedly, the company will roll out Model Y crossover in India, as their first car model in the country. Further, strengthening its position in India, the car maker is likely to double the import of car components from the country.
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