Tesla in talks to set up factory in India for electric cars starting at Rs 20 lakh: Report

Tesla is actively discussing the potential establishment of its auto parts and electronics chain in India with officials from the Indian government, according to an Economic Times report. These talks also involve seeking incentives and tax benefits, signalling a renewed interest from the US-based electric vehicle manufacturer in the Indian market. The discussions have gained momentum after Prime Minister Narendra Modi's recent meeting with Tesla CEO Elon Musk during his visit to the United States.

According to ET sources familiar with the matter, an annual capacity of five lakh vehicles and a starting price of Rs 20 lakh has been discussed. Tesla is keen on building its own supply chain ecosystem in India, despite the government's request for the company to evaluate the existing auto components supply chain within the country. A senior government official, who preferred to remain anonymous, stated that they have asked Tesla about their specific requirements and encouraged them to consider sourcing their needs from the Indian ecosystem. However, the official acknowledged that Tesla already has a well-established system of suppliers, making these initial talks crucial for making progress.

During these meetings, representatives from both Tesla in the US and Tesla India inquired about the incentives framework for the company and its partners, aiming to establish a manufacturing unit in India along with the necessary supportive ecosystem. They have also sought detailed information about potential incentives and tax breaks that could be made available to Tesla.

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In addition to engaging with the government, Tesla has been holding meetings with industry executives in India. At a recent gathering organised by the Society of Indian Automobile Manufacturers (SIAM) in the capital, Tesla expressed its intention to bring its own suppliers to India. While SIAM highlighted the presence of experienced and established Indian component manufacturers, advocating for their inclusion, Tesla reiterated its preference for an "all in-house" approach. The company emphasised that its specific set of quality standards can only be replicated through its existing partners.

These discussions between Tesla and the Indian government reflect the growing interest of international automakers in India's electric vehicle market. India has been actively promoting the adoption of electric vehicles to reduce pollution and dependence on fossil fuels. The government has implemented various initiatives and incentives to attract investments in the electric vehicle sector and develop the necessary infrastructure.

In the United States, the price range for the Tesla Model 3 is from $43,490 to $73,630 (Rs 35,70,00 to Rs 60,41,000). The Tesla Model Y is priced between $57,990 and $78,630 (Rs 47,60,000 to Rs 64,53,000). The Tesla Model X has a starting price of $109,990 (Rs 90,22,000), which can potentially reach up to $144,990 (Rs 1,19,00,000). The Tesla Model S has a starting price of $94,990 (Rs 77,89,000).

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