Tesla resumes India-entry talks with new factory proposal

Having shelved its India debut plans back in May 2022, Tesla is reportedly back in talks with the central government about setting up shop here, this time even suggesting establishing a factory in the country to make electric cars for export as well as domestic sales.

This is as per an article in Reuters who, citing sources, reported that the US-based automaker had discussions with Indian government officials on May 17.

1. Tesla suggested setting up local manufacturing and battery plant
2. Tesla looking to take advantage of the government’s PLI scheme

Tesla proposes local manufacturing 

The proposition comes after India last year refused to accept Tesla’s request to reduce import tax on cars, which can go up as high as 100 percent on CBUs costing above $40,000. India wanted Tesla to build cars locally, whereas the carmaker wanted to test the waters first with imports, and the discussions ended in an impasse.

While Tesla did not broach the subject of reduction of import taxes with officials in its latest discussion, it suggested establishing a factory, without offering details on either the location or the investment, a person in the know told Reuters on condition of anonymity. There were talks on which models could potentially be offered in India and even the scope of setting up a battery manufacturing plant in the future.

Senior executives from Tesla also spoke to the government on local sourcing of components among other matters, the newswire had reported earlier. Tesla reportedly also sought advice on how to avail of the local Production Linked Incentive (PLI) scheme. However, Tesla has not yet submitted any written proposal on the Indian market so far.