Elon Musk Announces Tesla’s Inevitable Entry into the Indian Electric Vehicle Market

Tesla CEO Elon Musk recently expressed his belief in the importance of making Tesla electric vehicles available in India. He stated that it is a natural progression for India to adopt electric cars, considering its status as the most populous country in the world. He emphasized that all vehicles will eventually become electric, implying that it is just a matter of time before this transition occurs. In line with this plan, Tesla has been actively exploring opportunities to establish a manufacturing plant in India.

The states of Maharashtra and Gujarat have reportedly presented attractive land offers to the company. The proposed plant, with an estimated investment of USD 2-3 billion, aims to serve both domestic and international markets for Tesla’s electric vehicles. This move aligns with India’s new EV policy, which provides incentives for setting up manufacturing plants in the country and aims to position India as a preferred manufacturing destination for EVs with advanced technology. Under this policy, global EV manufacturers are encouraged to invest in India, promote adoption of advanced EV technology, and contribute to the country’s Make in India initiative.

The government has set specific objectives, such as increasing localization to 50% by the fifth year of operation and imposing a 15% customs duty for vehicles valued at USD 35,000 or more. As part of its investment plans, Tesla intends to send a team of experts to scout for suitable locations for the proposed manufacturing facility in India. The government is expected to invite applications for the EV tariff reduction scheme, allowing eligible companies to import up to 8,000 vehicles a year. Elon Musk had previously expressed his confidence in bringing Tesla to India as soon as possible, following an invitation from Prime Minister Narendra Modi.

In November 2023, Union Minister for Commerce and Industry Piyush Goyal visited Tesla’s manufacturing facility in California and noted the growing importance of auto component suppliers from India in Tesla’s EV supply chain. This indicates the potential for increased collaboration between India and Tesla in the future.