Tesla representatives are scheduled to meet with India’s commerce minister this month to discuss the construction of a factory aimed at producing an entirely new $24,000 electric car, as revealed by a source familiar with the matter.
The company has expressed keen interest in establishing a factory in India to manufacture affordable electric vehicles (EVs) both for the domestic market and for export. This development indicates that the factory would primarily focus on producing the new vehicle model.
The upcoming meeting between Tesla and India’s commerce minister holds significant importance, as it represents the highest-level discussion between the two parties since Elon Musk’s meeting with India’s Prime Minister, Narendra Modi, back in June. During that meeting, Musk expressed his intent to make a substantial investment in the country.
If Tesla’s plans materialize, the introduction of their $24,000 electric vehicle in India would offer a remarkable 25% price reduction compared to their current lowest-priced model, the Model 3 sedan, which retails for approximately $32,200 in China.
Presently, electric vehicles constitute less than 2% of the total vehicle sales in India, despite the country being the world’s third-largest auto market.
In May, Tesla executives visited India and held talks with officials regarding the establishment of a manufacturing base for cars and batteries in the country.
According to two unnamed persons acquainted with the situation who asked to remain private and request anonymity, the conversations with Indian government representatives in New Delhi are scheduled to begin this month.
Tesla representatives are expected to meet with Indian Commerce Minister Piyush Goyal as part of these negotiations, with a focus on creating an electric vehicle (EV) supply chain and talking about the distribution of land for a facility.
Despite a request for comment, the commerce ministry did not provide a response.
Tesla has been actively offering significant discounts on its current models since the beginning of the year, with Elon Musk repeatedly emphasizing that the company’s long-term success will depend on drastically reducing the cost of electric vehicles.
In the past, Union Minister for Road Transport & Highway, Nitin Gadkari, conveyed his preference to Tesla officials, urging them not to manufacture their cars in China and then sell them in India. Instead, he suggested that Tesla should consider setting up production facilities in India, manufacture the cars locally, sell them within the country, and even export them from India. He assured the company of the government’s willingness to provide all necessary assistance and support to facilitate their operations within the country.
Tesla has been advocating for certain concessions on duties for its electric vehicles (EVs) in India. Conversely, the Indian government has been emphasizing the importance of Tesla establishing a manufacturing plant within the country, promising full support and assistance in that endeavor.
Tesla’s entry into the Indian EV market could potentially ignite a significant shift toward sustainable transportation solutions.