Tesla's entry into Indian EV market will be 'natural progression', says Elon Musk

Tesla aims to deploy a team of specialists to search India for potential sites for the prospective production facility as part of its investment ambitions.

Tesla CEO Elon Musk said that India, like every other country, should have electric car and it will be a "natural progression" for his firm to enter the Indian electric vehicle (EV) market.

Based on population, India is now the most populated nation in the world. India ought to have electric vehicles on par with the rest of the world, the billionaire said. In an X Spaces meeting with Nicolai Tangen, the CEO of Norges Bank Investment Management, Musk stated, "It's a natural progression to provide Tesla electric vehicles in India."

Musk predicted that "all vehicles will go electric and it is just a matter of time."

Recently, Tesla has stepped up its attempts to increase its market share in India and is actively looking for a suitable site to build a state-of-the-art manufacturing facility.

The state governments of Gujarat and Maharashtra,  have made Tesla Inc. attractive land offers for the construction of an EV manufacturing facility. This represents a significant advancement in India's electric mobility environment.

The proposed factory would cost between $2 billion and $3 billion to build and would serve the domestic and foreign markets for Tesla's electric cars, according to reports.

The action follows the introduction of incentives for establishing manufacturing plants in India under the country's new EV policy. Tesla intends to have a strong manufacturing presence in India as a major worldwide producer of electric vehicles.

The government's EV strategy has many main objectives, one of which is to promote India as a desirable manufacturing site for EVs packed with cutting-edge technology.

These consist of drawing in investments from respectable international EV producers, encouraging Indian customers to adopt cutting-edge EV technology, and supporting the nation's Made in India campaign.

According to the policy, manufacturers are encouraged to achieve significant levels of domestic value addition (DVA) and a minimum investment threshold of Rs 4150 crore ($500 million). Additionally, the government mandates that, by the third year of the manufacturing unit's establishment, at least 25 percent of the parts used to make the vehicles must be sourced domestically. It is anticipated that by the fifth year of operation, this localisation level would rise to 50 percent.

If the firm constructs manufacturing facilities in India within three years, a 15 percent customs charge would be levied for five years on cars priced at $35,000.

Tesla aims to deploy a team of specialists to search India for potential sites for the prospective production facility as part of its investment ambitions.

By the end of this month, the government will publicly welcome applications for the EV tariff reduction initiative, which will permit qualifying enterprises to import up to 8,000 vehicles annually, according to a Financial Times article that cited an Indian official.

Last year, Musk met Prime Minister Narendra Modi in New York and the billionaire praised the PM profusely, and told he was “incredibly excited about the future of India."

Musk had then expressed confidence that the electric vehicle manufacturer will arrive in the country "as soon as humanly possible".

(With inputs from agencies)