Tesla to send its team to scout locations for its plant in India
Upstox
2 min read • Updated: April 4, 2024, 2:33 PM
Summary
Tesla is set to send its team to India this month in order to scout locations for its $2-3 billion electric car plant, according to a media report. The move follows the government’s decision to reduce import taxes to attract global players.
According to media reports, Tesla is set to send its team to India this month in order to scout locations for its $2-3 billion electric car plant.
The team from Tesla is likely to scout locations in states like Tamil Nadu, Maharashtra and Gujarat where auto hubs already exist, it said. The presence of ports in these states makes them more attractive as potential locations, the media report added.
The move follows the government’s decision to reduce import taxes to attract global players. The Centre’s scheme aims to promote India as a manufacturing destination so that electric vehicles (EV) with the latest technology can be manufactured in the country. The policy is designed to attract investments in the electric vehicles space by reputed global electric vehicle manufacturers. The reduction in the tax has been one of the pre-conditions that Tesla has been demanding, according to the report.
New EV policy a boon for EV manufacturers
According to the government’s policy, a minimum investment of $500 million is required. The timeline has been set at three years for setting up manufacturing facilities in India and to start commercial production of e-vehicles, and reach 50% domestic value addition (DVA) within 5 years at the maximum. The government also said the customs duty of 15% would be applicable for a period of 5 years.
The total number of EVs allowed for import would be determined by the total duty foregone or investment made, whichever is lower, subject to a maximum of ₹6,484 crore.
Tesla's investment could lead large foreign inflow in the country
In the wake of Tesla’s investment, suppliers are anticipated to invest billions of dollars more which would then make this one of the largest foreign investments in the country, the report pointed out. The move comes at a time when Tesla’s sales figures have taken a hit. In the wake of the disappointing numbers, shares of the company have taken a beating this year with the stock having lost over 32% since the beginning of 2024.