Tesla re-open talks to enter India with new plant for local production
Tesla Inc. has suggested establishing a plant in India to produce electric vehicles for both domestic and international markets. Tesla appears to be desperate not to miss out on the profits that may be realized by entering the Indian market, as it attempts to renew contacts with the government with the goal of gaining entrance. The withdrawal of Tesla's intentions to invest in India and create a facility from where it makes vehicles not just for India but also for export to other countries was a big setback for the Indian EV sector.
The suggestion comes after India rebuffed Tesla's request last year to reduce the import duty on automobiles, which may exceed 100 percent. India wanted Tesla to construct automobiles locally, but Tesla wanted to test the market first with imports, thus the discussions broke down.
According to various reports, Tesla executives met with government officials this week in the hopes of reaching an agreement for the acquisition of a manufacturing site in India. This should likely seal the deal for Tesla's admission into the nation, as hefty import tariffs were the original impediment to Tesla's India aspirations.
While Tesla did not address decreasing import duties with Indian officials, it did offer to establish a new plant, but without naming a site or investment, according to the person, who declined to be identified because the discussions were private.
Making vehicles in India meshes with Indian Prime Minister Narendra Modi's "Make in India" drive to attract corporations, especially as companies strive to diversify their supply chains outside China.
Tesla executives also met with government officials to discuss, among other things, local component procurement. Tesla allegedly sought advice on how to take advantage of the local Production Linked Incentive (PLI) system. However, Tesla has yet to file a formal proposal for the Indian market.