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Wednesday, May 31, 2023

Elon Musk looks to expand Tesla through new Indian EV factory

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Elon Musk has hinted that India may be an attractive option for Tesla to build a new facility by the end of this year, setting off speculation that the electric carmaker is considering the country seriously. Tesla has been urged to invest in India, but the government has not given in to its requests for reductions on import duty and is tight-lipped on Tesla due to tensions between the two countries.

Just a few days ago, a team from Tesla traveled to India. Now, the founder and CEO of the firm, Elon Musk, has hinted that India is on the radar for the electric vehicle maker to build up a new facility.

Musk stated in an interview with the media that the electric vehicle manufacturer would choose a new location for a new facility by the end of this year. He also stated that India may be an attractive possibility for such an expansion.

Regarding the question of whether or not India will be a “interesting” candidate for this move, he responded with “Absolutely.”

When asked which nation would be the most interesting for Tesla to develop a facility in at the moment, Elon Musk responded, “We did make an announcement that Mexico would be our next location outside of the US.” At some point before the end of this year, we will most likely decide on a new site.

Musk’s words, even though he was being non-committal on India, set off speculations that the electric carmaker may finally be looking at the country seriously. This is especially the case given that he has previously expressed his desire to launch his cars in India despite complaining of “challenges” and high import duty in doing so. Musk’s words set off speculations that the electric carmaker may finally be looking at the country seriously.

The fact that Tesla’s team stopped by just a week ago only served to fuel the hype that has been going around, which is also gaining credibility as a result of the fact that the Indian government has been vocal about their interest in bringing the firm to India. Previously, the corporation attempted to get a decrease in the amount of import tariffs that were required to send test vehicles into the nation.

Last week, the minister of state for information technology and electronics, Rajeev Chandrasekhar, informed the Indian media that officials from Tesla’s headquarters held a meeting with several government branches, during which they were urged to explore making investments here.

They did, in fact, meet with representatives from the government. Chandrasekhar stated that “we have communicated to them that we are interested in seeing them invest in India and that we will work with them as they build their plants here.” We informed them that India is now considered a reliable destination for all participants in the supply chains for electronic goods and electric automobiles.

Approximately two years ago, Tesla conducted in-depth market study into the possibility of selling its automobiles in India. However, the company made the decision not to pursue the case a year ago when it was unable to get any special incentives from the Indian government.

However, the government did not give in to the company’s requests for reductions on import duty in order to facilitate the direct introduction of the company’s automobiles into the nation. Instead, they pointed to other companies in the country such as Mercedes-Benz, Tata Motors, and Mahindra & Mahindra that are successful in the local market.

The government was also tight-lipped on Tesla as a result of reports that the business may import automobiles from its facility in China, which is something that is not permitted owing to the increased tensions between the two countries.

At the moment, India levies a tax of 100% on the import of entirely built automobiles with a CIF (cost, insurance, and freight) value of more than $40,000, and a charge of 60% on automobiles that cost less than this amount.

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