Rumors about Tesla coming to the Indian market have been swirling on the internet for quite some time now. However, the most recent development stems from the Indian government’s revised EV policy, which was made official last month. The policy helps international companies by reducing customs duties on EVs. However, it links the incentives to a company’s manufacturing investment commitment. Here’s everything you should know about Tesla’s approach toward the Indian market and how sooner it can foray into the growing EV industry in the country.
Tesla’s Berlin Factory Is Making Right-Hand Drive Vehicles For Indian Roads
According to a new report by HT Tech, the world’s most valuable electric vehicle (EV) manufacturer, Tesla, has begun producing right-hand drive cars for the Indian market. Musk-led company is spinning the clock on its assembly lines in the factory situated in Berlin. The publication’s source has even confirmed that Tesla is looking forward to having these cars on the Indian roads by the end of this year.
Musk-Led Company To Set Up Manufacturing Plants In The Country
While these cars could be the initial prototypes built for testing in the subcontinent’s condition, Tesla is said to eventually set up assembly lines in the country. The report talks about the company’s team visiting India in the third week of April to scout for locations for establishing its mega manufacturing plants. Simultaneously, the company has also started the production of a limited number of its standard brands to compete with the Indian charging ecosystem in its German factory.
Tesla’s Entry Could Bring In About $3 Billion To The Indian Economy
Initially, the $600 billion market cap company is considering setting up its factories in Tamil Nadu, Maharashtra, or Gujarat, primarily because these states have excellent ports that can help transport equipment and assembly parts. In the course of setting its foot in India, Tesla could make the largest foreign direct investment (FDI) in the country, which includes an immediate investment of $3 billion (roughly Rs. 24,000 crores). The company will also bring in a $10 billion (roughly Rs. 80,000 crores) commitment from its partners.
Here’s How The New EV Policies Benefit Manufacturers
The new Indian EV policy states that companies that want to set up manufacturing plants in the country must invest at least $500 million (roughly Rs. 4,150 crores). Further, companies have three years to establish their plant in the country, and within five years, they should be able to manufacture at least 50 percent of their vehicle’s components in India.
Since it will take time to prepare the assembly lines and get them going, the government is also helping the companies reduce customs duty by 15 percent for the first five years. However, the maximum number of EVs a company imports is capped at 40,000 over five years. Moreover, the policy aims to increase EV production in the country, promoting competition and, eventually, lowering prices.
Moreover, Tesla’s entry into the Indian market should benefit the economy by bringing massive FDI. Further, it should also open up hundreds of employment opportunities at the mega manufacturing plants. Since Indian companies are also turning their attention toward the EV industry, launching electronic variants of their mainstream vehicles, there’s a good chance that Tesla’s entry will spruce up competition and, eventually, lower the prices.
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