Tesla is coming to India

Elon Musk’s electric car maker Tesla, and the Indian government are likely to finalize a deal that would permit the company to import American-made vehicles to the country. Some reports suggest Tesla can enter the Indian market in 2024. Apart from importing cars, the deal also includes the establishment of a manufacturing plant within two years.

Tesla is expected to make an initial investment of $2 billion to set up shop in India and would look to increase purchases of auto parts from the nation to as much as USD 15 billion. In addition to importing auto parts and shipping EVs, Tesla Inc. might also manufacture batteries in the country to bring down costs.

Official announcements are expected to be made in January 2024. Tesla is considering Maharashtra, Tamil Nadu, and Gujarat to set up their electric vehicle (EV) factory, with Gujarat being considered due to rapid infrastructural development.

Tesla currently has factories in the US, China, and Germany, and the Modi government's push for increasing EVs in India could lead to a major revenue boost for Elon Musk's firm. India's electric vehicle market remains low, with battery-powered cars accounting for just 1.3% of the total passenger vehicles sold last year, mainly due to the high cost of electric cars and a lack of charging stations.

While tariffs on importing Tesla vehicles to India can be exceptionally high, the prices could drop down to as low as ₹15 lakh if the vehicles are locally made. 

This move could prove crucial in boosting the Indian EV market by introducing an experienced EV manufacturer. However, local manufacturers will face significant competition with Tesla's entry into the Indian market.

The impact on the Indian EV market and the ability of local manufacturers to compete will unfold in the future.

Until then…

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