Tesla inches closer to India entry, may start importing EVs from 2024

Tesla is inching closer to an agreement with the Indian government to enter the country's EV market. Bloomberg has reported that the automaker is working on an agreement with the Indian government that would allow the EV manufacturer to ship its electric cars to the country from 2024. Also, the report claims that the automaker will set up a local production facility in the country by 2025.

There would be a concrete picture of Tesla's entry into the Indian market at the Vibrant Gujarat Global Summit scheduled for January 2024. Tesla is reportedly considering the states like Gujarat, Maharashtra and Tamil Nadu for setting up its first-ever manufacturing facility in India. However, the EV manufacturer is yet to finalise the location where it will set up the manufacturing plant. Interestingly, all three abovementioned states have well-established ecosystems for electric vehicles and exports.

The report further claimed that Tesla would commit an initial minimum investment of $2 billion in the country. Also, it would reportedly look to increase purchasing of auto components from local manufacturers and the worth of these auto parts will be as much as $15 billion. Besides making its cars locally later this decade, Tesla would also make some battery packs in India for its EVs, in an attempt to bring down production costs, claimed the report. However, it also stated that there has been no final decision yet and plans could change.

Interestingly, this comes after Tesla CEO Elon Musk said in June this year that the auto company plans to make a significant investment in India and he intends to visit in 2024. India's Minister of Commerce and Industry, Piyush Goyal, who visited Tesla’s plant in Fremont, California earlier this month, said in September that the company is planning to almost double purchases of auto parts from India to $1.9 billion in 2023. In 2022, the EV maker sourced parts worth $1 billion from India, as the minister said.

Tesla doesn’t import its electric cars directly into India because of the high import tariffs that are levied by the government. Tesla has appealed to the Indian government several times to reduce the import tariff so that it could bring its cars through the Completely Built Unit (CBU) route initially, before setting up a local plant. The Indian government, on the other hand, has always said that Tesla should first invest in India.