Tesla is reportedly on the verge of reaching an agreement with the Indian government, allowing the electric vehicle giant to start shipping cars to the country from next year. The deal is expected to include permission for Tesla to establish a manufacturing facility in India within the next two years. The official announcement is anticipated at the Vibrant Gujarat Global Summit in January 2024. States like Gujarat, Maharashtra, and Tamil Nadu, with existing electric vehicle ecosystems, are vying to host the Tesla plant.
Sources suggest that Tesla might invest at least $2 billion in the plant and increase its procurement of auto parts from India to around $15 billion. The company is also considering local battery manufacturing to reduce costs. Initially, there were reports of Tesla contemplating a battery storage facility in India in addition to the car manufacturing plant.
After years of disputes over import duties, Tesla has shown a willingness to enter the Indian market, aiming to produce affordable electric cars in the sub-$24,000 price range within the country. The Indian government is also keen on Tesla establishing a manufacturing hub to enhance the country's global image in the production sector. The government is expediting the clearance process for Tesla's entry, with discussions held in a meeting conducted by the Prime Minister’s Office. Additionally, Union Commerce Minister Piyush Goyal visited Tesla’s manufacturing facility in California, where it was mentioned that Tesla plans to increase the import of auto parts from India.