Musk's India electric car factory offer is gaining popularity, with a Tesla cost Rs 20 lakh

 

The eagerly anticipated India proposal from Elon Musk-led electric carmaker Tesla finally appears to be picking up steam after languishing for a while.

According to reports, a factory with a yearly capacity of 5 lakh EV units is planned to be established in India. According to ToI, car prices might start "as low as" Rs 20 lakh.

According to reports, the conversations are being led by India's Ministry of Trade and Industry. The aim of the government is to create a "good deal" while keeping the playing field level.

According to a report by ToI, the corporation wants to use India as an export hub in addition to China to reach consumers in the Indo-Pacific region.

"Tesla has come to us with an ambitious plan, and we are confident that the movement will be positive this time around, especially since it involves both local manufacturing and exports," a source told the publication.

ToI claimed to have sent a questionnaire to the company's corporate offices, but as of the time of publication, no response had been received.

Recent changes in the company's plans to invest in India follow Musk's meeting with PM Modi during the latter's official visit to the US a few weeks ago.

After their encounter, Musk, who had previously claimed to be a "fan of Mr. Modi," disclosed that the PM had been pressuring him to increase his stake in India.

He (Mr. Modi) clearly cares about India, as seen by the fact that he is pressuring us to make large investments there, which is something we want to do. We are merely attempting to determine the ideal timing. On June 21, Musk stated, "I am certain that Tesla will be in India and will do it as soon as humanly possible.

Prior to Modi's visit, a Tesla team traveled to India, which reopened communication with the administration.

The possible investment by Tesla in India is considered as being consistent with a global corporate aim to diversify production locations outside of China.

The Modi government's initiative to promote Make in India will receive a major boost if the strategy is successful. Companies like Apple's suppliers are spending heavily on local production and leveraging India as a platform for exports as part of the Make in India initiative.

The Indian market has long been Tesla's target, but the corporation has only occasionally taken steps in this direction.

After failing to receive special government incentives for importing its cars at a lower duty, it abandoned its aspirations to go in last year. Yet, the Modi administration has been stern in its demands that Tesla produces its vehicles in India rather than bringing them in from outside, notably China.

The ToI article noted that India has also been aggressively promoting the tremendous potential of the domestic auto market, which is now the fourth-largest in the world after finishing last year with sales of about 3.9 million units, trailing only China, the United States, and Japan.

Given that EVs are still somewhat more expensive than this, the Rs 20 lakh price tag could be a big selling point for consumers. Prices for EVs and traditional ICE automobiles still differ significantly. The disparity is decreasing, and industry insiders predict that lower prices may encourage more Indian consumers to choose EVs.

According to an ET report from April 2023, the average cost of an electric passenger car was more than twice as high (137%) as compared to a petrol-powered equivalent as recently as in 2020. According to data from Jato Dynamics, that difference has now decreased to 73%.