Tesla Holds Talks to Set up India Factory, EV Prices Could Begin at Rs 20 Lakh

The eagerly anticipated India proposal from Elon Musk-led electric manufacturer Tesla now appears to be picking up steam after languishing for a while. Tesla, a manufacturer of electric vehicles, is aggressively pursuing discussions with the Indian government to set up a local manufacturing facility in the country. This tactical approach intends to allow Tesla to produce EVs in India and sell them for a lower price tag. A recent industry report stated government sources as saying that Tesla intends to build up to 500,000 electric vehicles per year with a starting pricing of Rs 20 lakh. If successful, this development might have a big positive impact on India's developing EV industry. According to the report, which cited government sources, the company helmed by billionaire Elon Musk is also considering utilising India as an export hub as it prepares to export cars to nations in the Indo-Pacific region.

Also Read: Audi Q8 e-tron India Launch in August: Here's All You Need to Know

India to Become Tesla's Export Hub

Tesla plans to use the facility as an export base, just like it does with its operations in China. The company had shown interest in establishing local manufacturing in India in May. Given the participation of local manufacturing and exports, sources included in the report characterised Tesla's strategy as ambitious and expressed confidence in favourable results. There is no doubt that both Tesla and India would gain from the development of a local manufacturing base. Taking advantage of the rising demand for EVs would provide the auto giant access to the market that is rapidly expanding in the world. In addition, it signifies one more step India has taken towards becoming a powerhouse for global manufacturing. Tesla hopes to increase sales and strengthen its competitive edge in the emerging Indian EV market by localising production and lowering the price of its vehicles here. 

Significantly, Tesla had previously announced plans to join the Indian market but later decided against it owing to high tax rates that made its already-expensive automobiles inaccessible to the majority of Indian buyers. If Tesla's aim to set up local production in India is successful, it would be a big accomplishment for the firm, opening doors to a sizable market and supporting India's industrial growth as a leading player in the EV industry.

Also Read: Elon Musk Says 'Tesla Coming Soon to India' Post PM Modi Meet in New York

The US Meeting

Tesla's interaction with the government resumed in May when a delegation from the firm visited India ahead of PM Modi's US visit. After their meeting in the States, Musk disclosed that the PM was compelling him to increase his bet on India. "He really cares about India because he's pushing us to make significant investments in India, which is something we intend to do. We are just trying to figure out the right timing ... I am confident that Tesla will be in India and will do so as soon as humanly possible," said Musk about the Indian Prime Minister after the meet. The Indian market has long been Tesla's target, but the firm has only occasionally taken steps in this direction.

Given that EVs are still somewhat more expensive than this, the Rs 20 lakh price tag might be a big selling point for buyers in India. Prices for EVs and conventional ICE vehicles still vary significantly. The disparity is decreasing, and industry experts predict that lower pricing may encourage more Indian people to opt for EVs.

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