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Tesla’s Plans for India: A New Factory to Build New $24,000 Car

Tesla’s Plans for India: A New Factory to Build New $24,000 Car

Written by Sanjay Kumar


Automotive company

  • Founders: Elon Musk, Martin Eberhard, JB Straubel, Marc Tarpenning, Ian Wright
  • Headquarters: Austin, Texas, United States
  • Revenue: 8,146.2 crores USD (2022)
  • Subsidiaries: Tesla India Motors and Energy Private Limited, MORE
  • Founded: 1 July 2003, San Carlos, California, United States

Elon Musk-led Tesla is making strides towards establishing a factory in India, with the intention of producing an all-new $24,000 car specifically for the Indian market. This development comes as representatives from the company are preparing to hold discussions with Commerce Minister Piyush Goyal later this month to further explore their plans. The proposed vehicle is expected to be significantly cheaper, about 25% lower in price, than Tesla’s current lowest-priced offering.

The idea of building a factory in India has been on Tesla’s radar for a while now, as they aim to produce affordable electric vehicles tailored to the local market, as well as for export to other regions. This upcoming meeting represents a notable milestone, marking the highest-level discussions between Tesla and Indian authorities since Elon Musk met with Prime Minister Narendra Modi just last month. During that previous meeting, Musk had expressed his intention to make a substantial investment in the country.

In preparation for this endeavor, Tesla executives had previously visited India in May, engaging in talks with officials to lay the groundwork for establishing manufacturing facilities for cars and batteries within the country.

Reports from earlier this month revealed that Tesla is discussing an investment proposal with the Indian government to establish a factory with an annual capacity of manufacturing approximately half a million electric vehicles. Additionally, Tesla is exploring the potential of using India as an export base to ship cars to countries in the Indo-Pacific region.

Despite India’s keen interest in having Tesla manufacture vehicles locally, the plans have faced hurdles due to the high import taxes imposed by New Delhi. Electric vehicles are subjected to import taxes as high as 100%, creating obstacles to Tesla’s entry into the market. While discussions have not indicated any change in the tax stance, Tesla has been proactive in its efforts to establish a presence in India. Last year, the company hired a local team and began searching for showroom space, although those particular plans were eventually abandoned.

Nonetheless, Tesla is now back on track with a fresh proposal to set up a new factory, although the specific location and investment details are yet to be disclosed. This indicates a renewed commitment from Tesla to navigate the challenges and seize the opportunities presented by the Indian market for electric vehicles.

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