Tesla is set launch their EVs in India soon. The EV maker has started making right-hand drive versions of their EVs in their Germany factory. Tesla is also developing budget-oriented EVs for the Indian market

Tesla, led by CEO Elon Musk, is making significant strides in its efforts to enter the Indian market and establish manufacturing operations within the country.

According to reports by the Financial Times, Tesla has started the production of right-hand drive cars at its Berlin factory, specifically tailored for the Indian market. These cars are expected to hit Indian roads later this year, marking a significant milestone for the electric vehicle (EV) giant’s expansion into the South Asian nation.

Furthermore, Tesla is actively scouting locations in India for its manufacturing facilities, with plans to send a team to the country in the third week of April for this purpose. The company is considering states like Gujarat, Maharashtra, and Tamil Nadu as potential sites for its plant.

India’s welcoming move for Tesla
This move comes in the wake of the Indian government’s recent announcement of a new EV policy aimed at incentivizing manufacturing investment in the country.

The new policy, designed to promote the production of EVs domestically, requires companies interested in manufacturing EVs in India to make a minimum investment of approximately $500 million (Rs 4,150 crore) within three years.

Furthermore, these companies will have to ensure that at least 50 per cent of the vehicle’s value comes from components that have been manufactured in India, after a grace period of five years.

To facilitate Tesla’s entry into the Indian market, the government is offering limited privileges to import EVs at a lower custom duty of 15 per cent for five years, provided companies meet the investment commitments and setup timeline.

The maximum number of EVs allowed to be imported under this scheme is tied to the amount of investment made by the company.

Tesla’s Indian factory
Tesla’s plans for India extend beyond manufacturing, with reports suggesting the development of an affordable EV specifically targeted at the Indian market. This electric car, expected to be a two-door sedan or SUV, is slated to debut in Germany before making its way to India.

Tesla intends to manufacture this affordable model initially at its Giga Berlin facility, with subsequent production planned at its proposed manufacturing plant in India.

The company is reportedly eyeing coastal states like Gujarat, Maharashtra, and Tamil Nadu for its Indian manufacturing plant, leveraging their proximity to major ports for export purposes. Tesla’s ambitious plans include a significant foreign direct investment of $3 billion for producing its most affordable new small car in India, with additional commitments from partners totalling $10 billion to support the manufacturing ecosystem and battery industry in the country.

As Tesla ramps up its efforts to penetrate the Indian market, its entry is poised to reshape the country’s EV landscape and accelerate the adoption of sustainable transportation solutions. With India emerging as a key battleground for EV manufacturers, Tesla’s strategic investments and initiatives hold the potential to drive significant growth and innovation in the sector.

A Tesla, specially made for India
A budget-friendly Tesla model tailored for the Indian market was in the works as of November 2023. This anticipated vehicle, likely a compact sedan or SUV with two doors, is part of Tesla’s strategic focus on affordability and accessibility in emerging markets like India.

Initially slated a launch in Germany, the car will swiftly enter the Indian market as its second destination. Manufacturing will start at Giga Berlin, with plans to expand production to Tesla’s upcoming manufacturing facility in India, which will be located in either Gujarat, Maharashtra, or Tamil Nadu. These coastal states were chosen due to their access to major ports, which would make it easy for the exporting of locally manufactured vehicles to international markets.

Tesla’s investment in India is poised to be substantial, with an immediate injection of $3 billion earmarked for producing the affordable vehicle. Additionally, Tesla’s partners are expected to contribute $10 billion to bolster the manufacturing infrastructure in India, with an additional $15 billion earmarked for the battery industry ecosystem, signalling a significant commitment to the country’s economic growth.

(With inputs from agencies)

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