Tesla Officials Reportedly Visiting India To Reconsider Market

The US automaker has reportedly submitted a proposal to set up a manufacturing plant in India

After the Indian government rejected Tesla's suggestion to reduce taxes on imported electric cars in the country last year, the US carmaker is back for talks again as it is reconsidering the Indian market to diversify its reach and portfolio. It has been reported that Tesla officials will visit India with the proposal of establishing a new manufacturing facility in the country.

The Tesla executives are said to be meeting government officials next week, likely to discuss the location for the manufacturing plant and local sourcing of the components required to build the vehicles.

What Happened Earlier?

Tesla has been looking to enter the Indian market for years but was not thrilled about the high import taxes given that it would make its EVs a lot more expensive. The carmaker submitted its request for lowering duties on imported EVs in 2021 to test the market response before investing any significant amount in local manufacturing. There was also the matter of India’s tense relations with Tesla’s nearest manufacturing hub in China. Ultimately, ministers and officials in the government rejected Tesla’s requests on lower import duties without having any presence in the market whatsoever.

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Since Tesla’s Chief Executive Elon Musk was not happy with the rejection of the request, Tesla held its plan to enter the Indian market. He stated that he was not interested in investing in markets where he cannot sell the company’s EVs in the first place. But now, Tesla is reconsidering India as one of its global manufacturing hubs as it wishes to diversify from the Chinese market and resources. 

Why Not Just Sell As Imports?

While Tesla is not exactly a mass-market brand like Toyota or Hyundai, it does try to make its EVs somewhat affordable and accessible to promote EV adoption. That, sadly, would be a lot tougher in India with the country’s import duties that would place it in the same price range as luxury marquees like Mercedes-Benz and BMW. 

Setting up a local manufacturing plant in India will bring down the input costs significantly, resulting in lower prices of the EVs. But on the flip side, any degree of localisation would need massive investments from Tesla, a brand which has no real-world feedback on whether its models will be popular here or not.

Expected Models In India

Tesla has reportedly homologated a few models, including the Tesla Model 3, which was spied testing on India roads in 2021, in India already. In the same year, the Tesla Model Y was also sighted testing in the country. Recently, Tesla decided to stop making RHD iterations for the Model S and Model S, which puts these two out of consideration for our market. The carmaker has since released a new teaser of a baby crossover which is expected to be more affordable than the Model 3. You can read about it by clicking on this link.

Final Call: Will Tesla Come To India?

The question still remains: will Tesla come to India? If yes, when and how? We'll have to wait and see what happens when Tesla executives meet with government authorities in India. The company had already set up its local subsidiary in Bengaluru and should restart it if market plans do arise from the latest meeting.