Tesla, a major player in electric vehicles, is gearing up to reveal its plans for establishing a manufacturing plant in India during the Vibrant Gujarat Summit in January, with CEO Elon Musk expected to be in attendance, according to a report.
As per the Ahmedabad Mirror, Gujarat appears to align with Tesla's strategy focused on exports, catering to both local and global demand.
Previously, the company had been weighing options among Gujarat, Maharashtra, and Tamil Nadu due to their well-established electric vehicle ecosystems and export capacities.
Due to high tariffs, Tesla doesn’t directly import cars into India. The government clarified its stance, stating there were no plans to offer subsidies on import duties for electric vehicle imports.
Earlier reports suggested Tesla's readiness to invest up to $2 billion for an Indian factory, contingent on the government granting a concessional 15% duty on imported vehicles for the initial two years of operations in the country.
However, there's a disparity between India's goal of reducing concessional tariffs on imported cars versus Tesla's proposed numbers. Tesla indicated intentions to localize 20% of the value for cars made in India within two years, with an increase to about 40% in four years.
Presently, India imposes a 100% import duty on cars exceeding a cost, insurance, and freight value of $40,000, and a 70% duty on cheaper vehicles.
Initially, Tesla aims to introduce its Model 3, Model Y, and a new hatchback in India, priced around Rs 32 lakh, Rs 36 lakh, and Rs 20 lakh, respectively, in the US. Should India grant concessional import duties, reports suggest the prices of Model 3 and Model Y could be around Rs 38 lakh and Rs 43 lakh, respectively.
According to Bloomberg, Tesla might commit to an initial investment of approximately $2 billion and could potentially increase purchases of auto parts from India up to $15 billion.
The forthcoming announcement at the Vibrant Gujarat Summit is poised to shed light on Tesla's definitive steps towards establishing a manufacturing presence in India, potentially reshaping the landscape of the country's electric vehicle market.
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