Tesla plans to build factory in India for $24,000 car, to meet Piyush Goyal this month: Report

Tesla is planning to build a factory in India for its all-new $24,000 car and its representatives are set to meet Commerce Minister Piyush Goyal this month to discuss the plans, Reuters reported on Monday. 

Tesla has expressed an interest in building a factory in India that would produce low-cost electric vehicles (EVs) for the local market and for export, the report said, adding that the company had indicated that it would be for the new vehicle. 

The meeting with the commerce minister would be the highest-level discussion between Tesla and the Indian government since June when Elon Musk met India's Prime Minister Narendra Modi and said he intended to make a significant investment in the country.

Tesla's $24,000 EV in India would be 25 per cent cheaper than its current lowest-priced offering, the Model 3 sedan which sells for the equivalent of just over $32,200 in China. Electric vehicles currently account for less than 2 per cent of total vehicle sales in India, now the world’s third-largest auto market.

In May, Reuters reported that Tesla executives visited India and held talks with officials on establishing a manufacturing base for cars and batteries in India. Discussions with the government officials in New Delhi are scheduled to resume this month, the news agency reported citing sources.

As part of that, Tesla representatives are set to meet commerce minister Piyush Goyal and discussions are expected to centre around setting up an EV supply chain and discussing land allotment for a factory.

Tesla has aggressively discounted its existing models since the start of the year while Musk has repeatedly said its long-term success will hinge on bringing down the cost of EVs sharply.

Tesla has said its next-generation vehicle platform will slash production costs by 50 per cent and that multiple models - including an automated "robotaxi" - could be built from it, without detailing what those future models will be or their pricing.

A Tesla plant under construction in Mexico will produce vehicles on that lower-cost, high-volume platform, which the company has said it said it will take to other factories as well. Tesla currently produces EVs in California and Texas. Outside North America, it has plants in Berlin and Shanghai. The Shanghai plant is Tesla's largest, accounting for almost 40 per cent of the automaker's global capacity. Plans to add additional capacity there are pending regulatory approval.

Tesla has been pushing for some relaxation on duties on its electric vehicles (EVs) in India. However, the government has been asking the US-based carmaker to set up a manufacturing plant here in India and it will provide all the support. 

Union Minister for Road Transport & Highway Nitin Gadkari has in the past said that he has asked Tesla officials not to make the car in China and sell it in India. "It is something I had in my mind and I told them. Come to India, make it here, sell it here, and export from here. The government will provide you with all the help and support you need." 

(With inputs from Reuters)