Despite the recent disagreements between Tesla and the Indian government over import duty concessions, the electric vehicle (EV) manufacturer appears determined to establish a presence in India through a local manufacturing base. Union Minister Rajeev Chandrasekhar confirmed this in a statement to Reuters, saying, “They are very seriously looking at India as a production and innovation base.”
Chandrasekhar further emphasized that the Indian government is committed to supporting Tesla’s ambitions and will undoubtedly provide necessary facilities to facilitate their entry into the Indian market. The statements came after Tesla executives held a meeting with government officials on May 19 to discuss future plans and strategies.
In addition to setting up a manufacturing plant in India, Tesla’s CEO Elon Musk is considering the procurement of local components, according to the Reuters report. Discussions also covered potential incentives for car and battery manufacturing, indicating Tesla’s interest in manufacturing car batteries at the proposed plant.
Chandrasekhar highlighted that the conversation went beyond just cars, encompassing topics such as energy and manufacturing technology. While the specific plans Tesla has for India are yet to be disclosed, Chandrasekhar refrained from speculating on the matter, stating, “It’s too far for me to tell, and it’s not for me to say.”
Although no discussions regarding a reduction in import duties took place, Tesla reportedly expressed a desire to export its products to India before establishing a local manufacturing plant in order to test the market. The government’s refusal to grant special status to the EV maker stemmed from concerns about discouraging Indian startups and manufacturers already adhering to the existing tax regime.
In response to Tesla’s requests, Bhavish Aggarwal, CEO of Ola Electric, took a dig at Elon Musk, stating, “Tesla is free to come in and put up a shop here and sell its cars. They just want to be treated differently from others, which I believe is not in the interests of India.”
However, Musk’s reaction seemed to have changed, as he acknowledged India’s growing EV market, which currently boasts 2.17 million registered EVs. Recognizing the potential, Musk appears more open to establishing a manufacturing base in the country.
As Tesla continues to explore opportunities in India, the Indian government’s support and collaboration will play a crucial role in enabling the EV manufacturer to make its mark in the rapidly expanding Indian market.
