Model Y could be the first model Tesla rolls out in India

Currently, the rupee-equivalent price of the Model Y is around Rs 45 lakh in Germany. However, this figure will go up for Indian customers with the import duty and taxes. Queries sent by Moneycontrol to the Tesla India spokesperson on its offering for the Indian market have remained unanswered thus far.

While sourcing India-bound cars from China has been advised against, the US electric vehicle maker will get full access to a few batches of Teslas from its Gigafactory in Germany, as reported recently by Moneycontrol exclusively.

“Due to geopolitical tensions between India and China, the top management at Tesla has been categorically told by the concerned ministries not to import any car from the world’s largest EV market. Moreover, Indo-German ties on multiple disciplines have been inked earlier and the US EV maker is encouraged to leverage the same,” a person working in an advisory capacity with the company had earlier told Moneycontrol, on condition of anonymity.

Another person, who also didn’t wish to be named,  had told Moneycontrol that Tesla is seeking a customs duty cut on the import of electric vehicles as completely built-up units (CBUs) from Germany. The person added that the government also doesn’t seem too averse to the idea.

Tesla has invested  €5 billion to set up a Gigafactory at Brandenburg in Germany, which incidentally is its first facility in Europe. The US-based EV maker rolls out the Model Y crossover from that plant, which is to be expanded to 1 million units per annum. Latest media reports suggest that the company is planning to roll out a €25,000 (over Rs 20 lakh) car, which will also be launched in the Indian market. Moneycontrol has also learnt that the upcoming affordable model will be a two-door car.

According to a Bloomberg report, India is on the verge of finalising a deal with Tesla under which the company will be permitted to import its EVs into the country starting next year at a reduced imported duty and establish a manufacturing plant within two years.

The newswire agency reported, citing anonymous sources, that the official announcement is expected to be made at the Vibrant Gujarat Global Summit in January.  It also reported that Gujarat, Maharashtra and Tamil Nadu are being considered for Tesla’s manufacturing facility due to their well-established infrastructure.

Moneycontrol couldn’t independently confirm this development.

The same Bloomberg report suggested that Tesla is planning to invest around $2 billion initially in a new plant in India.  Furthermore, the company plans to buy auto components worth up to $15 billion from the country. It is also considering making some batteries in India to reduce costs. However, no final decision has been made regarding the deal and things may change.

Last week, Union minister Piyush Goyal visited the Tesla factory in Fremont, California, where he caught up with key officials of the US company. However, he was unable to meet Tesla CEO Elon Musk due to the latter's health issues.

“Tesla’s entry into India will spur other EV manufacturers in India to excel and compete and will provide everyone working in the automobile industry an opportunity to test out Tesla’s self-driving technology,” said Christie Fernandez, founder of Sooorya EV Pte Ltd, which is working on a purpose-built 8-seater electric MPV for sustainable last-mile mobility in emerging markets.

He added, “Though EV makers in China were initially apprehensive about Tesla’s entry, today many of them compete with Tesla for market share.”