Tesla selects China over India for EV production

American electric carmaker, Tesla, has chosen China over India as its first EV production base outside its market, according to Reuters.

As per reports, China has eased some policies that will enable the EV maker to easily set up its production facility that includes allowing the wholly owned factory to come up in a free trade zone, helping it to lower its production cost in the world’s largest EV market.

With Tesla preferring to set up shop in China, any plan to set up a production facility in India would have been put on hold. From Tesla’s point of view, China already has driven a fair distance in terms of electric mobility, supported by the government’s favourable subsidies and recent 2019/2020 NEV targets. In comparison, the EV industry in India, despite the recent NITI Aayog push for electric mobility by 2030, remains nascent and the country is in dire need of an adequate charging infrastructure, among other EV industry growth drivers.

The latest Tesla news update comes in the wake of the report in June 2017, when Tesla CEO Elon Musk had mentioned that the company was in discussion with the government of India for getting temporary relief on import penalties/restrictions till a local factory was built. Though, it now seems that China has been able to offer a sweeter deal. 

The Indian government’s ambitious shift towards electric mobility, as well its ‘Make in India’ initiative, was seen as a way to attract global manufacturers to shift their production in the country.