Elon Musk Hints at Tesla’s Entry into India; New Factory Likely This Year

Washington: Tesla CEO Elon Musk has expressed interest in expanding Tesla’s presence in India. Musk stated in an interview that India is an “absolutely” interesting choice for a new Tesla location. While Tesla already has factories in the United States, Germany, and China, Musk sees potential in the Indian market.

Earlier this year, Musk selected Mexico as the next location for a Tesla Gigafactory. However, reports have indicated that a team of senior Tesla executives is planning to visit India to explore opportunities in the niche electric vehicle (EV) market. The discussions with Indian leadership will likely revolve around the possibility of sourcing local components for Tesla’s car models.

Musk has acknowledged facing challenges from the Indian government in the past, which has delayed Tesla’s entry into the Indian market. Despite repeated appeals from top Indian leaders, Tesla has yet to establish a presence in the country. One major hurdle has been the high import duties imposed by India on cars. Currently, imported cars priced above $40,000 (Rs 30 lakh) are subject to a 100% tax, while cars below $40,000 face a 60% import tax.

Musk has expressed his desire to launch Tesla cars in India; however, he has highlighted that the country’s import duties on EVs are very high, in fact, “highest in the world by far.” This poses a challenge for Tesla, as it may significantly increase the price of its vehicles in the Indian market. For example, the Tesla Model 3, which is considered affordable in the US with a price tag of $40,000, would likely become unaffordable in India with an expected price of around Rs 60 lakh.

Despite these obstacles, Musk remains optimistic about the potential of the Indian market. If Tesla can navigate the challenges, it may establish a factory in India, further expanding its global footprint and catering to the growing demand for electric vehicles in the country.