Tesla weighs options for new factory, India among top contenders
Tesla's CEO, Elon Musk, plans to select a new location for a Tesla factory later this year, and India is emerging as a potential contender.
Musk expressed his interest in India as a possible site for a new Tesla facility during an interview with the Wall Street Journal. He stated that if all goes well, India would be an "absolutely" interesting choice.
Earlier this year, in March, Musk announced Mexico as the next location for a Tesla Gigafactory. Tesla already operates multiple factories in the United States, including one in Fremont, California.
The company also has factories in Berlin, Germany, and Shanghai, China.
Reports have recently circulated indicating that a team of senior Tesla executives plans to visit India to explore opportunities in the niche electric vehicle (EV) market and expand Tesla's presence beyond China.
Bloomberg, citing inside sources, reported that discussions with senior Indian leadership would focus on the potential for local sourcing of components for Tesla's car models.
Musk has frequently mentioned the challenges faced from the Indian government regarding the introduction of Tesla's products in the country.
In a post, he cited "challenges with the government" as the reason for Tesla's absence in India. In 2021, the team that was initially hired for operations in India was redirected to concentrate on the Middle East and larger Asia-Pacific markets.
Numerous Indian leaders have made persistent appeals to Musk, urging him to bring Tesla to India, but these efforts have so far been unsuccessful.
The current tax structure in India adds to the challenges. Imported cars priced above $40,000 (Rs 30 lakh) are subject to a 100% tax, including insurance and shipping expenses, while cars below $40,000 face a 60% import tax.
Considering the price point of Tesla's Model 3, which exceeds Rs 30 lakh ($40,000), the vehicle would become unaffordable for the Indian market due to these import duties. The expected price tag in India would be around Rs 60 lakh.
Musk has expressed his desire to introduce Tesla cars in India, but he has criticized the country's import duties on electric vehicles, stating that they are "the highest in the world by far."
As the year progresses, Musk's decision on the new Tesla factory location is eagerly awaited, and if India proves to be the chosen destination, it could potentially mark a significant step forward for the Indian EV market while bolstering Tesla's global presence. (Edited)