In a recent interview with the Wall Street Journal, Elon Musk, CEO of Tesla, expressed his interest in choosing a new location for a Tesla factory by the end of this year, with India being a prominent contender. Musk confirmed that India is "absolutely" an intriguing choice for expanding Tesla's operations. Earlier this year, Musk selected Mexico as the location for the next Tesla Gigafactory. Tesla currently operates factories in the United States, including Fremont, California, as well as in Berlin, Germany, and Shanghai, China.
Reports emerged this month regarding a team of senior Tesla executives planning a visit to India to explore the potential of entering the niche electric vehicle (EV) market and expanding beyond China. According to Bloomberg's sources, discussions with senior Indian leadership revolved around the possibility of local sourcing for Tesla's car components. Musk has previously cited challenges from the government as a reason for Tesla's absence in India. He stated that Tesla has faced obstacles preventing the release of its products in the country.
The team that Musk hired in India last year was redirected to focus on the Middle East and the broader Asia-Pacific markets. Despite repeated appeals from Indian leaders, Tesla's entry into the Indian market has yet to materialize. Presently, India imposes a 100 percent tax on imported cars priced over $40,000 (approximately Rs 30 lakh), inclusive of insurance and shipping expenses. Cars valued below $40,000 are subject to a 60 percent import tax.
While the Tesla Model 3 is considered an affordable model in the United States with a price tag of $40,000 (over Rs 30 lakh), the imposition of import duties in India would significantly increase its cost, making it unaffordable in the local market with an expected price of around Rs 60 lakh. Musk has expressed his desire to launch cars in India, but he highlights that the country's import duties on EVs are "the highest in the world by far."
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