It seems like Tesla may be able to sell its cars in India via the CBU route, and produce Tesla cars in India at a later date. The Indian government and Tesla are said to be close to reaching an agreement that will not only allow the US EV maker to sell models made overseas but also set up a manufacturing plant in India.
- Tesla's India plans may be announced at Vibrant Gujarat Global Summit in January 2024
- Tesla could produce battery packs in India
- Tesla looking to purchase USD 15 billion worth of Indian auto parts
While talks between Tesla and the Indian government had stalled last year, they reopened negotiations in May this year. According to sources familiar with the Indian government, the new agreement could see Teslas sold in India by next year, with the carmaker churning out Indian-made cars from its new plant within the next two years.
Sources tell us that an announcement regarding the same is expected at the Vibrant Gujarat Global Summit, which is scheduled to take place from January 10-12, 2024. At the moment, Gujarat, Maharashtra and Tamil Nadu are being considered for the factory as these three states have relatively well-developed ecosystems for making EVs and aiding in their export.
Tesla India manufacturing and battery plant details
For the setting up of the manufacturing plant, the US-based EV maker would have to commit to a minimum investment amount of USD 2 billion (about Rs 16,665 crore), said a source. Tesla had earlier planned to source USD 1.9 billion (approximately Rs 15,700 crore) worth of auto components during this year, almost doubling the amount it sourced last year, and is looking at increasing the purchase of Indian auto parts to USD 15 billion (about Rs 1.2 lakh crore).
While no final decision has been made and the above mentioned plans could change, Tesla CEO Elon Musk had said in June that the company plans to make a "significant investment" in India; he also intends visiting the country in 2024. A report by Reuters had also showed that the brand is looking to make and sell battery storage systems in India, and it had even submitted a proposal to Indian officials seeking incentives to build the Powerwall battery storage factory.
Tesla car prices to benefit from localisation and tax reduction
The Indian government is now said to be considering lowering import taxes for international EV carmakers for a period of five years, but only if those firms commit to setting up local manufacturing plants. This policy could see our market opening up to Tesla cars as the company lays the groundwork to get its India operations moving. According to sources, when Tesla’s first made-in-India models go on sale, they could be sold for as little as USD 20,000 (about Rs 16.67 lakh).
Rivan RS 
Viraaj Bhatnagar
Uday Singh
Suraj Viswanathan
