The leading electric vehicle (EV) manufacturer, Tesla, has initiated the production of right-hand drive cars for the Indian market at its Berlin factory, according to a source familiar with Tesla’s plans. The aim is to introduce these vehicles on Indian roads later this year. Additionally, Tesla will dispatch a team to India in the third week of April to scout for suitable locations to solidify its extensive manufacturing plans aimed at producing vehicles in India for the broader developing world.
The source confirmed that Tesla has begun working on both the export and manufacturing aspects of its plans following India’s recent announcement of its new EV policy. This policy, unveiled last month, entails reduced custom duties on EVs but requires a corresponding commitment to manufacturing investment within a specified timeframe, coupled with a strong emphasis on localization.
Initial reports by HT on January 13 hinted at India’s imminent announcement of a new EV policy, with a focus on attracting global giants like Tesla, in line with India’s climate, economic, and strategic objectives in the EV and battery industry. The policy’s release, a day before the election code of conduct took effect, underscores the government’s prioritization of the sector. On Wednesday, FT reported Tesla’s plans to send a team to India this month to scout for suitable manufacturing locations.
The source disclosed that Tesla is contemplating Gujarat, Maharashtra, or Tamil Nadu as potential sites for its plant, primarily due to their coastal locations with access to ports. Tesla is poised to make what could possibly be the largest foreign direct investment (FDI) in India. This may include a direct investment of $3 billion for producing a new small car from an Indian plant, alongside a $10 billion commitment from other partners to support this manufacturing venture, and a cumulative $15 billion investment in the battery industry ecosystem.
Meanwhile, Tesla has commenced the production of a limited number of its standard models to compete in the Indian market at its German factory. This move will also aid the company in building and testing a charging ecosystem. Proponents of the project view Tesla’s investment as both a significant moment for India’s EV industry, akin to Suzuki’s entry, and a transformative opportunity for India’s manufacturing aspirations, comparable to Apple’s impact.
