As India progresses toward formulating a new electric vehicles (EV) policy, Tesla is reportedly engaged in advanced discussions to enter the country with a potential investment commitment of nearly $30 billion over the next five years. The investment would encompass a manufacturing plant, battery ecosystem, and ancillary industries.
Sources close to the company’s official business plans have revealed that Tesla’s potential investment could include an immediate injection of $3 billion to produce a new small car in India for the wider developing world. Additionally, other partners may contribute $10 billion to support this manufacturing venture, with a cumulative $15 billion allocated for the battery industry ecosystem over five years.
The prospective entry aligns with India’s evolving EV policy, which Tesla anticipates will provide rebates in the current import duty structure for foreign-made EVs. If the policy meets Tesla’s requirements, the company aims to bring a limited number of its standard brands to compete in the Indian luxury car market. Simultaneously, Tesla might invest in a local factory to roll out the first small car within two years.
The proposed factory, characterized by a high degree of locally sourced content, could partially cater to the Indian market and primarily focus on exports to countries in Asia, Africa, and Latin America. This initiative is poised to be a substantial foreign direct investment commitment in India, with a potential total investment of $30 billion.
Advocates of the project suggest that Tesla’s investment would contribute significantly to India’s objectives related to local manufacturing, climate crisis mitigation, integration into global supply chains, and the broader strategic partnership between India and the US.
While Tesla has not officially commented on its specific plans for India, sources suggest that Elon Musk, the founder of Tesla, admires India and Prime Minister Narendra Modi. The company remains committed to expanding its presence in India, considering multiple potential auto manufacturing hubs within the country.
The proposed investment, if materialized, could mark a significant milestone in India’s EV industry, resembling the impact of the “Suzuki moment” for small cars in the 1980s and an “Apple plus moment” for manufacturing aspirations in India.
It is essential to note that the Indian government, through various policy measures and supportive actions, demonstrates a strong commitment to promoting EV adoption in the country, with initiatives like the EV30@2030 campaign targeting a significant shift to electric vehicles by 2030.
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