SUMMARY
The team from the US will be deployed across Maharashtra, Gujarat, and Tamil Nadu to identify potential sites for the manufacturing plant
Last month, the Centre approved a policy under which EV companies would have to pay lower import duties if they agree to set up manufacturing unit in the country
Tesla is expected to produce a cheaper electric car “Model 2” by the end of 2025 at the Indian factory
Furthering its India ambitions, global electric vehicle manufacturing giant Tesla Motors will be reportedly sending a team to the country later this month to scout locations for its first $2-$3 Bn factory.
According to a Financial Times report, the team from the US will be deployed across Maharashtra, Gujarat, and Tamil Nadu to identify potential sites for the manufacturing plant.
The company has decided on these three states due to easy access to ports, which will enable seamless exports, the report said, citing a source.
The development comes days after the Centre approved a new policy under which EV companies would have to pay lower duty on imports of EVs if they agree to set up manufacturing facilities in the country.
Under the scheme, import duty on vehicles with cost, insurance and freight (CIF) value of $35,000 or above will be reduced to 15% for five years for companies which agree to invest at least INR 4,150 Cr (about $500 Mn) in India to set up manufacturing facilities.
The policy, which was unveiled on March 15, addressed a key demand of Tesla before it initiated its India foray.
Last year, reports said the Elon Musk-led electric car maker planned to invest $2 Bn in India for setting up a factory. However, the company was demanding a concessional duty of 15% on its imported vehicles during the first two years.
Tesla is expected to produce a cheaper electric car “Model 2” by the end of 2025 at the Indian factory, the FT report said. The electric car will be sold at around $24,000 (INR 19.87 Lakh). The company is expecting to produce 500K cars per year when its factory reaches full capacity.
After setting up the manufacturing unit, the company is also expected to invest in setting up a battery storage system factory in the country.
Tesla’s India entry comes at a time when adoption of electric vehicles is picking up pace in the country. Backed by the incentives provided by the Centre and the state governments, electric vehicle adoption in the country is led by the two-wheeler category, a space which houses a number of startups.
The registrations of electric two-wheelers in the country crossed the 1 Lakh mark for the first time last month, driven by a sharp increase in the sales of most of the manufacturers in the category. Ola Electric leads the charts among electric two-wheeler manufacturers in terms of sales.
