Tesla has sent scouts out across India to pick a location for a new EV factory that would cost between $2 billion and $3 billion, the Financial Times has reported, citing unnamed sources in the know.
According to the FT sources, priority will be given to states with already established and well-developed car manufacturing infrastructure.
The report follows a move by the Indian government to lower import tariffs on electric vehicles but only for companies that commit to manufacturing the vehicles in India starting within three years after making the commitment.
These import tariffs were the biggest obstacle to Tesla's expansion on the subcontinent, with the additional financial load sometimes coming in at 100% of the price of the car. This is what discouraged the company from investing in an Indian factory two years ago. Talk about a factory resurfaced last year, however, after negotiations with the Modi government.
"I am confident that Tesla will be in India and will do so as soon as humanly possible," Elon Musk said at the time. The aim is to produce affordable cars at the Indian factory, with a local publication reporting in mid-2023 the starting price of the future vehicles could start at $24,400.
The plan for India also envisages turning it into an export hub for not only Asia but also the Middle East and even southern and eastern Europe, the Financial Times reported.
Meanwhile, Tesla has had to face a decline in sales, reporting deliveries of 387,000 cars in the fourth quarter of 2023, when production topped 433,000 cars. The trend is not reserved for Tesla, either. Its main competitor, Chinese BYD also saw a slump in its EV sales in the final quarter of last year, although its quarterly sales result was an increase on the final quarter of 2022.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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