Tesla plans to provide electric vehicles in India, eyes manufacturing plant

Tesla CEO Elon Musk has expressed his vision for India's transition to electric vehicles (EVs), stating that it's a natural progression for every country, including India, to adopt electric cars. In a recent X Spaces session with Nicolai Tangen, CEO of Norges Bank Investment Management, Musk highlighted the importance of India's growing population and the need for EVs as part of the global automotive landscape.

"India is now the most populous country in the world. India should have electric cars just like every other country has electric cars. It's a natural progression to provide Tesla electric vehicles in India," Musk remarked during the session.

Musk's comments come as Tesla intensifies its efforts to enter the Indian market. The company is actively scouting for a suitable location to establish a state-of-the-art manufacturing plant for EVs. Both Maharashtra and Gujarat state governments have reportedly extended lucrative land offers to Tesla for this purpose.

The proposed manufacturing plant is expected to require an investment ranging from USD 2 billion to USD 3 billion, catering to both domestic and international markets for Tesla's electric vehicles. This move aligns with India's new EV policy, which incentivizes the establishment of EV manufacturing units in the country.

Under the government's EV scheme, which aims to promote advanced EV technology adoption and domestic manufacturing, certain incentives and requirements are outlined. These include a minimum investment threshold, customs duty exemptions for locally manufactured vehicles, and limits on imported EVs based on investment levels.

Tesla's investment plans include sending a team of experts to explore potential locations across India for the manufacturing facility. The government is expected to formally invite applications for the EV tariff reduction scheme, allowing eligible companies to import a limited number of vehicles per year.

Elon Musk had previously expressed his intention to visit India in 2024, following an invitation from Prime Minister Narendra Modi. During a meeting in New York, PM Modi had extended support to Tesla's entry into India, indicating positive prospects for the electric carmaker's operations in the country.

In November 2023, Union Minister for Commerce and Industry Piyush Goyal visited Tesla's manufacturing facility in California, noting the increasing involvement of Indian auto component suppliers in Tesla's EV supply chain.