Photo: Tesla | Edited
Tesla's plans to build a car gigafactory in India started to gain weight as more details emerged. Tesla officials are rumored to meet India's commerce minister this month for the second time to discuss gigafactory plans. Tesla is expected to build an all-new $24,000 electric vehicle in the country, similar to the one slated for production at Giga Mexico in 2025.
Earlier this month, Panasonic started talks with the local government to establish a battery factory in India. The plans were reportedly related to the imminent production facility Tesla will construct in India after Elon Musk met India's Prime Minister Narendra Modu in June. Panasonic wants to access the Production Linked Incentive (PLI) Scheme, which mirrors the Inflation Reduction Act in the US, to start producing Li-ion battery cells in India.
The incentives offered through this program would cover 20 GWh of manufacturing capacity, which is enough to build 400,000 electric vehicles with a 50-kWh battery pack or 500,000 EVs with a 40-kWh pack. This is the most important step in setting up a supply chain in the country, although Tesla needs more than just battery cells to build EVs in India.
As Tesla encouraged suppliers to open factories in India, it also started considering its options for building a local gigafactory. Reuters reports that Tesla representatives will meet India's commerce minister this month to discuss plans for the factory, specifically land allotment. Tesla intends to build a low-cost EV in India, with local media discussing an all-new $24,000 electric car. This sounds precisely like the affordable Gen-3 model that Tesla is preparing for production at Giga Mexico in 2025.
The discussions will likely touch on a sensitive matter: state incentives. Tesla wanted preferential treatment to sell its EVs in India before starting production. Currently, cars imported in India attract custom tariffs ranging from 60% to 100%, depending on their characteristics. Last year, similar talks between Tesla and the Indian government led nowhere, and Tesla abandoned plans to invest in the country. Following the high-profile meeting between Narendra Modi and Elon Musk in June, these plans are again on the table.
Will Tesla get its incentives this time? Local officials say absolutely not. According to the Times of India, which cites a government official, Tesla would not get preferential treatment. Instead, the EV maker is encouraged to apply for support under existing schemes, such as the PLI that Panasonic wants to access. "Generally, the policy will be the same for all. For a single company, the government may not like to make separate policies. So far, there is no plan to give special treatment," the official told the Times of India.
Tesla representatives visited India in May to meet officials from various ministers, including the Commerce and Industry Ministry. If a new meeting is planned this month, this means the talks advance faster than previously thought. Elon Musk said after meeting Modi that Tesla will be in India "as soon as humanly possible." Tesla has a lot of work to do to start local production. Less than 2% of vehicles sold in India are battery-electric, despite being the world's third-largest auto market.
The incentives offered through this program would cover 20 GWh of manufacturing capacity, which is enough to build 400,000 electric vehicles with a 50-kWh battery pack or 500,000 EVs with a 40-kWh pack. This is the most important step in setting up a supply chain in the country, although Tesla needs more than just battery cells to build EVs in India.
As Tesla encouraged suppliers to open factories in India, it also started considering its options for building a local gigafactory. Reuters reports that Tesla representatives will meet India's commerce minister this month to discuss plans for the factory, specifically land allotment. Tesla intends to build a low-cost EV in India, with local media discussing an all-new $24,000 electric car. This sounds precisely like the affordable Gen-3 model that Tesla is preparing for production at Giga Mexico in 2025.
The discussions will likely touch on a sensitive matter: state incentives. Tesla wanted preferential treatment to sell its EVs in India before starting production. Currently, cars imported in India attract custom tariffs ranging from 60% to 100%, depending on their characteristics. Last year, similar talks between Tesla and the Indian government led nowhere, and Tesla abandoned plans to invest in the country. Following the high-profile meeting between Narendra Modi and Elon Musk in June, these plans are again on the table.
Will Tesla get its incentives this time? Local officials say absolutely not. According to the Times of India, which cites a government official, Tesla would not get preferential treatment. Instead, the EV maker is encouraged to apply for support under existing schemes, such as the PLI that Panasonic wants to access. "Generally, the policy will be the same for all. For a single company, the government may not like to make separate policies. So far, there is no plan to give special treatment," the official told the Times of India.
Tesla representatives visited India in May to meet officials from various ministers, including the Commerce and Industry Ministry. If a new meeting is planned this month, this means the talks advance faster than previously thought. Elon Musk said after meeting Modi that Tesla will be in India "as soon as humanly possible." Tesla has a lot of work to do to start local production. Less than 2% of vehicles sold in India are battery-electric, despite being the world's third-largest auto market.
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