During a meeting with Indian officials today, Tesla reportedly proposed the construction of a factory there. It would be a U-turn in approach after years of talks with the most populous country in the world. Tesla is yet to penetrate the world’s largest car market, which is located in India.
Elon Musk has been promising for years that Tesla will soon enter the Indian market, but the country’s high import taxes have slowed the company’s progress. However, throughout the course of the past year, the automaker has shown signs that it is getting ready for a launch.
Bengaluru, the capital of the southern Indian state of Karnataka, is where Tesla formally established an Indian corporation in 2021. A major barrier to Tesla’s entry into the Indian market has been the country’s high import charges on electric vehicles, but Indian government officials announced this summer that they are examining Tesla’s request to significantly lower these costs.
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Due to high import duties, manufacturers cannot import China’s most popular EVs.
Despite the government’s best efforts to stimulate domestic manufacturing, its high import levies on electric vehicles (EVs) have so far prevented manufacturers from bringing in the most popular EVs made elsewhere, particularly in China.
Although Tesla has shown interest in the country as a potential location for future manufacturing, the company follows the same strategy it has used in every other market it has entered: importing automobiles first.
Seven models of Tesla’s electric vehicles were approved in India in 2021, and the company’s vehicles were sighted undergoing road testing in the country the following year.
However, Tesla was unable to reach an agreement on import duties and postponed its ambitions to enter the Indian market until 2022.
There have been stories in the Indian press over the past few days that Tesla had dispatched executives to the nation for meetings with government officials.
A new Tesla factory in India has been suggested, according to Reuters.
Tesla Inc has proposed setting up a factory in India to build electric cars for domestic sale and export, the carmaker told government officials on Wednesday, according to a source with direct knowledge of the matter.
This would represent a shift in strategy from entering a market with an emphasis on sales to focusing on manufacturing first.
Analysis by Electrek
Tesla’s eventual abandonment of the effort is understandable. India’s market is too enormous to ignore.
Considering the lack of significant automobiles in the country, I have no doubt that Tesla has spent the past year preparing to join the market with its own manufacturing.
With cheaper Tesla vehicles on the horizon, it’s a logical step to take. The “$25,000 Tesla” would be the first product made in a Tesla factory in India. It is based on Tesla’s next-generation platform, which requires significantly less money to get up and running.