A Model Y electric vehicle is pictured during the start of production at Tesla’s “Gigafactory” on March 22, 2022 in Gruenheide, southeast of Berlin. – American electric car pioneer Tesla received the green light for its “gigafactory” in Germany on March 4, 2022, paving the way for production to begin shortly after an approval process fraught with delays and setbacks . (Photo by Patrick Pleul / POOL / AFP) (Photo by PATRICK PLEUL/POOL/AFP via Getty Images)
Patrick Pleul | Afp | Getty Images
You’re here will explore sites in India this month to set up an electric vehicle factory with an investment of up to $3 billion, according to a Financial Times report, as part of Prime Minister Narendra Modi’s plans to boost domestic manufacturing.
The value of the plant could be between $2 billion and $3 billion, the FT reported on Wednesday, citing two people familiar with the plans.
The electric vehicle maker will focus on the states of Maharashtra, Gujarat and Tamil Nadu which already have auto hubs, the report said.
Tesla did not immediately respond to CNBC’s request for comment.
India last month lowered import duties on some electric vehicles for automakers willing to invest at least $500 million and start domestic production in the country within three years.
“The Indian government has approved a program to promote India as a manufacturing destination so that electric vehicles with latest technologies can be manufactured in the country,” the government said last month.
Modi met Tesla CEO Elon Musk in June and invited him to explore investment opportunities in India for electric vehicles.
In 2021, India approved a production-linked incentive scheme for automobiles and auto components with a budget of Rs 25,938 crore ($3.1 billion) for a period of five years , as part of the government’s efforts to boost domestic production and reduce dependence on imports. The program was extended for another year on January 1.
“Tesla is the most attractive electric vehicle maker for India due to its large investment appetite for global expansion and its ability to develop electric vehicle production ecosystems,” said Ashwin Amberkar, analyst at Canalys earlier this month.
“India’s new electric vehicle policy offers increasing incentives, making it a great opportunity for Tesla to establish a strong position in the country,” Amberkar said.
Tesla is in fierce competition with China’s BYD, which overtook the US electric vehicle giant in the fourth quarter of 2023 as the world’s largest electric vehicle maker, selling more battery-powered vehicles than Tesla. However, in the first quarter of 2024, BYD’s sales fell below those of Tesla.
China’s electric vehicle market accounts for nearly 60% of global electric vehicle sales. Brands, from BYD to Xpeng to Xiaomi, have heated up the market with price wars and new model launches.
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