Tesla launch in India won’t be favored by center, states may offer: report

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Tesla, the world’s largest electric vehicle maker, will not get any special offers from the center as it plans to enter the Indian market. As of now, the government does not plan to offer any tailored incentives to the electric carmaker owned by Elon Musk, sources confirmed, news agency PTI reported. However, states are free to allow special offers for Tesla to set up factories in India if the government wishes, the sources said. Tesla executives met with officials in Delhi last month and recently revived interest in India. The meeting sparked fresh speculation about Tesla launching an electric vehicle in the country after it shelved plans after earlier talks stalled.

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Updated on:
June 7, 2023 at 09:45 am


Tesla executives met Indian officials last month in a move seen as the U.S.-based electric carmaker prepares to launch EVs in the country. (Reuters)

According to PTI reports, Tesla intends to establish a complete supply chain in India. The move is seen as an effort by Tesla to reduce its reliance on China, its largest market outside the United States. Tesla was also keen on building an electric car manufacturing plant in India, reports said, something Elon Musk later confirmed. However, after the government rejected such offers, Tesla has not approached the Center this time to reduce import duties unless the electric car maker commits to producing electric vehicles in India. PTI quoted a source as saying, “The government is not considering any tailor-made incentives at the moment. The state is another matter. The states may compete with each other and someone may give them (concessions).”

Earlier, the center had advised Tesla to set up a local manufacturing plant if it wanted to sell electric vehicles in India. India’s Union Minister Nitin Gadkari has said that India would welcome Tesla if it produced electric vehicles locally instead of importing them from China. Elon Musk rejected the offer, saying: “Tesla will not have a manufacturing plant anywhere that would not allow us to sell and service cars in the first place.”

Tesla’s renewed foray into India is seen as an attempt by the electric carmaker to diversify away from China, its largest market outside the United States. The move is significant, especially ahead of Prime Minister Narendra Modi’s upcoming visit to the US this month. Several automakers, including Tesla, may be forced to find new destinations for their electric vehicle business in the future amid rising U.S.-China tensions. In addition to components, battery manufacturing in China is key to the global EV business. India may be an alternative market where the government is eager to promote local manufacturing.

First published date: Jun 7, 2023 at 09:45 AM CST

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