Tesla chief Elon Musk may unveil India’s investment plan this month. Confirming his upcoming visit to India, Musk tweeted late on April 10 that he was looking forward to meeting Prime Minister Narendra Modi.
“Looking forward to meeting with Prime Minister @NarendraModi in India!” Elon Musk wrote on X.
Looking forward to meeting with Prime Minister @NarendraModi in India!
— Elon Musk (@elonmusk) April 10, 2024
Elon Musk’s visit to India, where he is likely to announce investment in the country, comes at a time when Prime Minister Narendra Modi is bidding for his third term. It may give a fillip to the Government’s image for attracting big-ticket investment. It may also boost the BJP’s poll prospects, given that the party in power at the Centre is aggressively campaigning with global corporates to invest in India.
Earlier this week, in an X Spaces session, Elon Musk said that India, like every other country, should have electric cars, and it will be a natural progression for his company to provide Tesla electric vehicles in the country.
According to sources, Elon Musk, during his India visit, might make the much-anticipated announcement of setting up Tesla’s first plant in the country. Elon Musk will likely meet Prime Minister Narendra Modi on April 22 in the national capital, according to Reuters.
Apart from announcing Tesla’s maiden foray in India, Elon Musk is also expected to disclose details of the automobile major’s plans for the country.
However, the final agenda for Elon Musk’s trip to India is yet to be confirmed. It was reported earlier that Tesla officials were exploring potential sites in India for a manufacturing plant, which is anticipated to necessitate an investment of approximately USD 2 billion.
Tesla’s interest in expanding its presence in the Indian market has intensified, with the company actively searching for a suitable location to establish a cutting-edge manufacturing facility.
According to sources, the State Governments of Maharashtra and Gujarat have extended attractive land offers to Tesla for this purpose, signalling significant progress in India’s electric mobility landscape.
As reported earlier, initially, Tesla would manufacture entry-level cars in India, priced around Rs 25 lakh, with an annual capacity of 5 lakh units.
Tesla’s move seemed to have fast-tracked in the wake of India’s new EV policy, where incentives are proposed for setting up manufacturing units in India.
The policy has asked for a minimum investment threshold of Rs 4150 crore (USD 500 million) and encouraging manufacturers to achieve significant levels of domestic value addition (DVA), the Government mandates that by the third year of setting up the manufacturing unit, at least 25 per cent of the parts used to make the vehicles should be sourced domestically. This localisation level is expected to increase to 50 per cent by the fifth year of operation.
Under the new EV policy, for vehicles valued at USD 35,000 or more, a 15 per cent customs duty will be imposed for five years if the manufacturer builds manufacturing facilities in India within three years.
The total number of EVs allowed for import under the policy will be limited based on the investment made or of a maximum value of Rs 6484 crore, whichever is lower. If the investment exceeds USD 800 million, a maximum of 40,000 EVs can be imported, with no more than 8,000 per year. Unused import limits can be carried over.
Earlier in June last year, Elon Musk said he was planning to visit India in 2024, added that he was confident that the electric carmaker will be in India and will do so “as soon as humanly possible.” He had told reporters in New York following a meeting with Prime Minister Narendra Modi, who was then on a four-day State visit to the US. Elon Musk had said that PM Modi invited him to India.
“I would like to thank PM Modi for his support and hopefully, we will be able to announce something in the future,” Elon Musk had said.
In November 2023, Union Minister for Commerce and Industry Piyush Goyal visited Tesla’s manufacturing facility in California’s Fremont.
Tesla had been interested in investing in India, but “high import duty” structures were a bone of contention. Elon Musk had reportedly requested India to lower taxes and allow the company to sell vehicles built elsewhere at a competitive price. Before the new EV policy, import duty on completely built unit (CBU) vehicles was 25 to 100 per cent.
(with inputs from ANI)
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