Photo: Tesla
Tesla is expected to launch sales in India in preparation for a more consistent presence there, including setting up a local factory. The first model to ship to India is the Model Y, with the first RHD units starting production at Giga Berlin.
Geopolitics is a serious business, forcing companies to make strange decisions to appease all the involved parties. In the case of Tesla, rivalries and conflicts between various countries forced it to shuffle production around the world, sometimes ignoring its interests. For instance, vehicles sold in Taiwan are not produced in neighboring China but in Europe or the US. That's because Taiwan doesn't want Chinese imports in the country.
A similar ballet is considered for the rumored India presence. Although Giga Shanghai is the closest gigafactory, no Chinese-made Tesla will ever enter India. The two countries hate each other so much that Chinese companies need to produce locally to sell in India and vice versa. This is why selling its electric vehicles in India is problematic for Tesla, considering the high shipping costs. However, these are only part of the problem.
Tesla has been considering the Indian market for a long time, but the country has insanely high tariffs (up to 110%) for imported vehicles. The Indian government has tried to push Tesla to build its electric cars in India, as everybody else does. However, Elon Musk doesn't want to commit to a local gigafactory before knowing if there are enough buyers for its EVs. Tesla asked for preferential treatment to gauge demand, including lowering import tariffs for the cars imported into India.
Although both parties agreed that Tesla should build a local factory, neither wanted to compromise on their positions. However, things appear to move, as recent reports indicate that Tesla is already setting aside production at Giga Berlin for the Indian market. More specifically, Tesla has started producing a right-hand-drive variant of the Model Y in Europe. Until now, RHD vehicles were exclusively produced at Giga Shanghai. Rumors indicate that the first units should reach Indian customers by the end of the year.
The move suggests that Tesla has finally convinced the Indian government to lower the import tariffs. Tesla wouldn't have started producing RHD vehicles if this didn't happen. But then again, India wouldn't have agreed to drop the tariffs without Tesla's commitment to invest in local production. This means Giga India is a fait accompli, and we will have an official announcement soon. My guess is that the only thing left to determine is the location of the upcoming Indian gigafactory.
Earlier this month, the Financial Times wrote that a team from Tesla will arrive in India later this month to scout locations for the upcoming factory. Tamil Nadu, Maharashtra, and Gujarat are on the shortlist. Tesla plans to invest about $2 billion to build the new factory, with additional funds earmarked for developing the local Supercharger network. Although Tesla hasn't confirmed, the Indian gigafactory is expected to produce a variant of the upcoming next-generation EV that Tesla is developing at Giga Texas.
A similar ballet is considered for the rumored India presence. Although Giga Shanghai is the closest gigafactory, no Chinese-made Tesla will ever enter India. The two countries hate each other so much that Chinese companies need to produce locally to sell in India and vice versa. This is why selling its electric vehicles in India is problematic for Tesla, considering the high shipping costs. However, these are only part of the problem.
Tesla has been considering the Indian market for a long time, but the country has insanely high tariffs (up to 110%) for imported vehicles. The Indian government has tried to push Tesla to build its electric cars in India, as everybody else does. However, Elon Musk doesn't want to commit to a local gigafactory before knowing if there are enough buyers for its EVs. Tesla asked for preferential treatment to gauge demand, including lowering import tariffs for the cars imported into India.
Although both parties agreed that Tesla should build a local factory, neither wanted to compromise on their positions. However, things appear to move, as recent reports indicate that Tesla is already setting aside production at Giga Berlin for the Indian market. More specifically, Tesla has started producing a right-hand-drive variant of the Model Y in Europe. Until now, RHD vehicles were exclusively produced at Giga Shanghai. Rumors indicate that the first units should reach Indian customers by the end of the year.
The move suggests that Tesla has finally convinced the Indian government to lower the import tariffs. Tesla wouldn't have started producing RHD vehicles if this didn't happen. But then again, India wouldn't have agreed to drop the tariffs without Tesla's commitment to invest in local production. This means Giga India is a fait accompli, and we will have an official announcement soon. My guess is that the only thing left to determine is the location of the upcoming Indian gigafactory.
Earlier this month, the Financial Times wrote that a team from Tesla will arrive in India later this month to scout locations for the upcoming factory. Tamil Nadu, Maharashtra, and Gujarat are on the shortlist. Tesla plans to invest about $2 billion to build the new factory, with additional funds earmarked for developing the local Supercharger network. Although Tesla hasn't confirmed, the Indian gigafactory is expected to produce a variant of the upcoming next-generation EV that Tesla is developing at Giga Texas.
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