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Elon Musk’s Tesla Likely to Set Up First India Manufacturing Plant in Gujarat Tesla’s Prospective Venture in Gujarat

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The forthcoming Vibrant Gujarat Summit, set for January 2024, is on the cusp of materializing a groundbreaking deal: the establishment of Tesla’s maiden electric vehicle manufacturing unit in India.

Reports suggest that negotiations are reaching the denouement, with Gujarat emerging as the preferred destination. The murmurs in the corridors hint at an imminent conclusion of what could be a game-changing move for both Tesla and India’s burgeoning electric vehicle segment.

According to The Economic Times, the enigmatic Elon Musk has his sights set on India, with Gujarat evidently catching his fancy as the probable host for the Tesla India plant. Although no official pronouncement has been forthcoming, the allure of this news has electrified the atmosphere.

Anticipation is rife about the potential presence of two influential personalities, Tesla’s CEO Elon Musk and the Prime Minister of India, Narendra Modi, at the summit, The Economic Times reported.

However, the conspicuous absence of any official communication either from the EV behemoth or the state government has shrouded the matter in an air of suspense.

During a recent Cabinet briefing, the government of Gujarat, voiced by spokesperson Rushikesh Patel, radiated confidence in Tesla’s prospective investment in the state. This optimism is anchored in Tesla’s willingness to plow up to $2 billion into establishing a local factory. This monumental decision, however, hangs precariously on the fulfillment of a pivotal condition: a concessional duty of 15% on imported vehicles during the plant’s inception.

In the preceding month of November, Tesla had expressed a similar willingness to invest up to $2 billion in setting up a local factory in India. The proviso was clear: the government was mandated to bestow a concessional duty of 15% on imported vehicles during the company’s initial two years of operation on Indian soil.

Import duties imposed by India have been a sticking point in Tesla’s aspirations to foray into the country. With tariffs reaching up to 100% on luxury cars, India’s policy diverges starkly from Tesla’s plea for a preferential 15% duty.

The negotiations transcend the mere advent of Tesla vehicles on Indian roads; they embody a concerted effort to invigorate the local EV ecosystem. Tesla has unveiled plans to localize up to 20% of car components within two years, scaling up to 40% within four years, as per discerning reports.

Tesla’s vision encompasses the introduction of the Model 3, Model Y, and an even more affordable hatchback to the Indian market. By procuring concessional import duties, the prices of these models could witness a noteworthy nosedive, rendering them more accessible to Indian consumers, the reports added.

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