Photo: @narendramodi via Twitter | Edited
Elon Musk said a possible Tesla investment in India is very likely after meeting prime minister Narendra Modi in New York. While this doesn't necessarily mean an EV gigafactory, it might signal that India is open to lowering the car import tariffs that prevented Tesla from selling its EVs into the country.
The first rumors of Tesla entering the Indian market surfaced in 2020, although the EV maker and the Indian government could not agree on the conditions. India has a massive 110% tariff on vehicles imported from China, and Elon Musk could not convince local authorities to make an exception for Tesla. India wanted Tesla to build its cars in the country, but the American carmaker wanted to test the market before committing to local manufacturing.
This deadlock has caused Tesla to freeze its plans for the Indian market and consider alternatives, such as Indonesia and South Korea, for possible gigafactory locations. Neither is as attractive as India, though, especially as the other two countries are much closer, geographically, to Giga Shanghai. India is also a huge market, although it's probably best suited for entry-level models. This is perhaps why Musk met India's prime minister Narendra Modi again in New York on Tuesday and why the talks appeared fruitful this time.
After the meeting, Modi announced "multifaceted conversations," while Musk was more enthusiastic, announcing a "significant investment and relationship in the future." Musk also said that Modi "urged Tesla" to invest in India. The Tesla-India relationship has officially entered a new phase with this meeting, as countries around the world court Musk for local investments. Musk confirmed he would visit India next year and that Tesla would be in the country "as soon as humanly possible."
Reuters reported that Musk would brief Modi on plans to establish a manufacturing base in India. This doesn't necessarily mean an EV gigafactory, as the two men also discussed solar power, stationary battery packs, and space exploration. Later, India's foreign ministry spokesperson tweeted saying Modi had invited Musk to "explore opportunities in India for investments in electric mobility and rapidly expanding commercial space sector."
India might be a big market, but it lacks a charging infrastructure, and sales of electric vehicles are almost zero. While this seems like a huge impediment, it can also be an opportunity. There's a massive market to be fed with electric vehicles in the following decades, and Tesla has a chance to become the region's dominant player. Tesla's next-generation compact EV might be ideally suited for the local market.
Tesla is expected to pick a location for its next gigafactory by the end of the year. India is high on its radar, allowing it to reduce reliance on China as its main manufacturing base. China increasingly becomes a risky position as tensions between Washington and Beijing increase. So far, Tesla has been spared the drama, thanks to the great personal relationship of Elon Musk with Chinese leaders. Still, that might not last forever if things change for the worse.
This deadlock has caused Tesla to freeze its plans for the Indian market and consider alternatives, such as Indonesia and South Korea, for possible gigafactory locations. Neither is as attractive as India, though, especially as the other two countries are much closer, geographically, to Giga Shanghai. India is also a huge market, although it's probably best suited for entry-level models. This is perhaps why Musk met India's prime minister Narendra Modi again in New York on Tuesday and why the talks appeared fruitful this time.
After the meeting, Modi announced "multifaceted conversations," while Musk was more enthusiastic, announcing a "significant investment and relationship in the future." Musk also said that Modi "urged Tesla" to invest in India. The Tesla-India relationship has officially entered a new phase with this meeting, as countries around the world court Musk for local investments. Musk confirmed he would visit India next year and that Tesla would be in the country "as soon as humanly possible."
Reuters reported that Musk would brief Modi on plans to establish a manufacturing base in India. This doesn't necessarily mean an EV gigafactory, as the two men also discussed solar power, stationary battery packs, and space exploration. Later, India's foreign ministry spokesperson tweeted saying Modi had invited Musk to "explore opportunities in India for investments in electric mobility and rapidly expanding commercial space sector."
India might be a big market, but it lacks a charging infrastructure, and sales of electric vehicles are almost zero. While this seems like a huge impediment, it can also be an opportunity. There's a massive market to be fed with electric vehicles in the following decades, and Tesla has a chance to become the region's dominant player. Tesla's next-generation compact EV might be ideally suited for the local market.
Tesla is expected to pick a location for its next gigafactory by the end of the year. India is high on its radar, allowing it to reduce reliance on China as its main manufacturing base. China increasingly becomes a risky position as tensions between Washington and Beijing increase. So far, Tesla has been spared the drama, thanks to the great personal relationship of Elon Musk with Chinese leaders. Still, that might not last forever if things change for the worse.
BREAKING: Elon Musk confirmed @Tesla is looking to invest in India & says he is visiting next year.
— Sawyer Merritt (@SawyerMerritt) June 20, 2023
“We don’t want to jump the gun on an announcement, but it’s quite likely that there will be a significant investment and relationship in the future.” pic.twitter.com/09RMDaZlRZ
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