Tesla Reportedly Looking at Potential Sites for $3 Billion EV Manufacturing in India

By Trisha Andrada

Apr 04, 2024 04:26 AM EDT

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As part of Prime Minister Narendra Modi's efforts to strengthen local manufacturing, Tesla will reportedly look for potential sites in India to establish an electric vehicle (EV) plant this month. The investment might reach $2 billion to $3 billion.

Tesla Explores Locations for $3 Billion Assembly Factory in India.

According to insiders who talked to the Financial Times, Tesla will dispatch a team from the United States to explore potential locations for the facility by the end of April. The team would look at areas with strong automotive industries, such as the western states of Maharashtra and Gujarat and the southern states of Tamil Nadu.

One source speculated that Tesla would be looking at locations around New Delhi, as many car companies have factories nearby in Haryana. The second source, however, said that the automaker would prioritize the other three states due to their proximity to ports, which would facilitate the export of automobiles.

This move follows last month's decision by India to reduce taxes on expensive imported electric cars for businesses that pledge to produce them in the nation within three years.

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India Implements New Policy to Encourage EV Production

Last month, India reduced the tariffs on EVs for select manufacturers that are prepared to spend $500 million and start manufacturing in the nation within three years.

"The Government of India has approved a scheme to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country," the government stated at the time, as reported by CNBC.

In 2021, the Indian government allocated 25,938 crore rupees ($3.1 billion) to a production-linked incentive plan for vehicles and auto parts over five years. The goal was to increase local manufacturing and decrease reliance on foreign suppliers. The plan got a one-year extension on January 1.

READ MORE: Tesla Raises Prices in China While Local Chinese EV Makers Lowered Theirs

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