Tesla in India: Elon Musk's firm likely to import cars from German unit, skip China

Tesla

Tesla is likely to import cars from its German factory to India, skipping China amid concerns raised by the Indian government, the Times of India reported. This comes as the EV-maker is set to set up some of its operations in India.

Tesla plans to begin sales in India initially through imports and later through local manufacturing. The company plans to apply for benefits under the new EV policy announced by the Indian government in March 2024, the report added. This will allow the automaker to import 8,000 cars annually at a customs duty rate of 15 percent (as against 110 percent) if it commits to invest $500 million for a local factory.

Moneycontrol couldn't independently verify the report.

Several state governments have approached the EV maker to set up its manufacturing unit. Gujarat, Maharashtra, Tamil Nadu and Telangana are among the frontrunners.

"There is excitement and nervousness in investment departments of key states as they scurry to attract the Tesla investments. The plan is to approach the company management as soon as possible and begin negotiations, including giving out any special benefits," a source told the publication.

When asked about Indian government's demand to not to import cars from China, a person familiar with the matter told ToI that Tesla "appears to be in sync" with the request, considering the Indo-China diplomatic issues. "German factory in Berlin, which produces Tesla Model Y, will now be used to manufacture right-hand drive cars, which will come to India," the source was quoted as saying.

Automaker Tesla has posted job advertisements on LinkedIn, seeking candidates for several roles based in Mumbai, Delhi and Pune. This signals the entry plans for the Elon Musk-led company after his meeting with Prime Minister Narendra Modi during his US trip.

Tesla is reportedly planning to set up its showrooms in Mumbai's business district of BKC, and at Aerocity in New Delhi. It plans to begin its retail operations in India by April this year, CNBC-TV18 reported citing people familiar with the development.