New Delhi: Electric carmaker Tesla plans to send a team from the United States to India by the end of April to assess potential locations for a proposed $2 billion to $3 billion electric car factory, the Financial Times reported on Wednesday.
The company led by billionaire Elon Musk’s entry into the Indian market coincides with a slowdown in demand for electric cars in its core markets, the United States and China, amid an increasingly intense festival by players.
The drop in demand led to a decline in Tesla deliveries in the first quarter and a lack of estimated figures.
According to the report, the automaker will prioritize Indian states known for their automotive hubs, such as Maharashtra, Gujarat, and Tamil Nadu.
Last month, India cut import taxes on some electric cars produced by manufacturers willing to invest at least $500 million and start domestic production within three years. The move was seen as bolstering Tesla’s customers in the market.
Tesla has been trying to identify a presence in India for several years, but negotiations with New Delhi required a manufacturing commitment.
India’s vehicle (EV) market is small but growing steadily. Tata Motors, India’s leading automaker, currently dominates the market.
In 2023, electric cars accounted for around 2% of total car sales in India, and the government aims for this figure to reach 30% by 2030.
Analysts suggest that Tesla’s access to the Indian market could spur new investments in electric cars and offer benefits to local automaker manufacturers, Reuters reported.
Image credit: GDP
Over the past year, Tesla has engaged in talks with the government and has included a meeting between CEO Elon Musk and Prime Minister Narendra Modi in June.
In July last year, the company expressed interest in setting up a factory in India to manufacture an electric vehicle at a cost of $24,000. However, the company has demanded a tax cut on more models it intends to sell in India, Reuters reported.
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