According to government sources cited by the Times of India, Tesla is in talks with the Indian government regarding an investment proposal for a factory that would have the capacity to produce around 500,000 electric vehicles annually.
The report also mentioned that the company, led by billionaire Elon Musk, is considering using India as an export base to ship cars to countries in the Indo-Pacific region.
The starting price for these vehicles, as reported, will be 2 million rupees, which is more than double the price of India’s cheapest EV, the MG Comet, and half a million rupees more expensive than the Tata Nexon EV, which is currently the top-selling electric car in the country.
Last year, Tesla faced challenges in its plans to enter the Indian market when the government declined to reduce import taxes on its vehicles. India imposes import taxes of up to 100% on electric vehicles.
While India had expressed interest in Tesla manufacturing vehicles locally, the company expressed its desire to initially export cars to the country to assess demand.
In the month of May, Tesla initiated conversations with government officials regarding the incentives provided by the government for its cars and battery manufacturing. The Indian Commerce and industry ministry is leading the current talks and aims to strike a favourable deal that ensures a level-playing field as discussions now involve both local manufacturing and exports.
In a recent meeting between Tesla CEO Elon Musk and Indian Prime Minister Narendra Modi, the prime minister urged the automaker to make a substantial financial commitment in India.