After years of negotiations that led to nowhere, Tesla and India may finally be able to meet in the middle.
According to a report from the Times of India (via Electrek), Tesla has opened discussions with the Indian government about setting up a vehicle assembly plant in the country with an annual capacity of up to 500,000 cars.
Tesla is reportedly planning to produce an electric vehicle model that would start around $24,350 (2 million Indian rupees). No details are available about the car, which would become Tesla’s most affordable model if it comes to fruition.
Interestingly, that’s roughly the same price target Tesla has advanced for its future small EV that it plans to build in China and Mexico. It would certainly make sense to produce the car in India as well given the country’s low production costs.
In addition, the US EV maker is looking at using India as an export base for countries in the Indo-Pacific region, government sources told the paper.
“Tesla has come to us with an ambitious plan, and we are confident that the movement will be positive this time around, especially as it involves both local manufacturing and exports,” a source told Times of India.
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Apparently, the commerce and industry ministry is leading the talks and the government is hoping to put forth a “good deal” while making sure that a level-playing field is maintained for other automakers.
This latest development in the Tesla-India relations comes not long after CEO Elon Musk met with Prime Minister Narendra Modi on June 21 during the Indian leader’s visit to US. Musk said on the occasion that he was a “fan of Mr. Modi,” adding that the PM had been pushing him to invest in India.
“He [Mr. Modi] really cares about India because he’s pushing us to make significant investments in India, which is something we intend to do. We are just trying to figure out the right timing,” Musk told reporters last month. “I am confident that Tesla will be in India and will do so as soon as humanly possible.”
The Indian government has always been adamant that it wouldn’t open its car market to Tesla unless the automaker pledged to build an assembly plant in the country.
India has been an important target market for Tesla for years but the EV maker abandoned plans to move in last year when the government refused to grant special incentives that would have allowed it to import EVs to India at lower duty.
After a long stalemate, Tesla reopened discussions with the Indian government in May when a team from the company visited the south Asian country a month ahead of Modi’s visit to the US.
