Centre's PLI scheme may tempt Tesla to set up facility in India, says minister

As India waits for Tesla to arrive with its fleet of electric cars, the US-based EV maker is yet to confirm launch of its first vehicle amid talks with the Centre over high import duties. According to reports, Tesla was recently asked by the Centre to share its production plan in India before expecting any tax leniency. Now, Union Minister Mahendra Nath Pandey says that the PLI scheme for the auto sector will attract Tesla to build a factory here.

"Tesla will definitely be attracted to this scheme...I am hopeful," Pandey was quoted by news agency PTI as he reacted to the impact of the Centre's announcement of ₹25,938-crore production linked incentive to promote local manufacturing of advanced automotive technology products like electric vehicles. "The scheme will give a huge boost to the auto sector and make it globally competitive. We have received huge positive responses from all the industry on the scheme," Pandey said.

A few weeks ago, Tesla CEO Elon Musk had expressed his reservations on launching its EVs in India saying that the import duties in the country are among the highest in the world. Tesla has urged the Centre to standardise the tariff on electric cars to 40 per cent instead of 110 per cent currently, irrespective of the customs value.

However, he had also hinted that a Tesla factory in India is ‘quite likely’ if the Centre agrees to its proposals. Earlier this month, the Centre reportedly asked the US-based EV maker to ramp up local procurement and share detailed manufacturing plans before its demand for tax reduction is considered.

Tesla recently moved a step closer to making this possible as it has received an approval to make or import four of its models in the country. The four Tesla models have been certified as being roadworthy in India.