Tesla joins hands with Indian EV sector
Tesla plans to build an electric car factory in India. Following obstacles to implementing import tax cuts and disagreements over local production, Tesla has submitted a proposal to build a factory to make electric cars for both domestic sales and exports, Reuters said hours ago. Reported to the development comes as Tesla executives are in talks with Indian government officials about local sourcing of parts and other related matters.
India’s refusal to cut car import taxes (up to 100%) has forced Tesla to look for other ways to enter the Indian market. While specific details, including the location of the planned factory and investments, have yet to be announced, Tesla is aiming to align the business with Indian Prime Minister Narendra Modi’s “Make in India” campaign. The campaign aims to attract companies by promoting local production and diversification of supply chains beyond China.
Tesla and Indian officials discussed lowering import taxes, which stalled last year. Tesla initially wanted to test the market with imported goods, while India stressed local manufacturing. As a result, Tesla temporarily halted its plans to sell cars in the country. This is even though it hired a local team and looked for a showroom.
Tesla has renewed its interest in India, recognizing the enormous potential of the Indian market and the need to establish a local manufacturing base. Tesla executives are currently traveling to India to meet with government officials from various ministries. The outcome of these talks could influence Tesla’s go-to-market strategy and pave the way for future cooperation between the company and Indian authorities.
Reports and news speculate why Tesla sticks to the Indian market. India is a major market for electric vehicles, so it was only a matter of time before Tesla became actively involved. Anticipating this move, Tesla probably did a lot of research and planned to ensure a seamless entry into the Indian market. A local factory will be established to accomplish this.
Additionally, Tesla will introduce more affordable cars, including the long-awaited $25,000 Tesla. If Tesla builds a factory in India, it will likely begin production of this next-generation model based on its next-generation platform, which could reduce capital expenditures. Tesla will likely build its long-awaited $25,000 affordable electric car in India.
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