Tesla Discusses Auto Incentives And Battery Production With India

According to a person with direct knowledge of the negotiations, Tesla Inc. has spoken with officials regarding incentives granted by India for the manufacture of cars and batteries as the automaker reconsiders its entry into the Indian market.

According to Reuters, an American manufacturer of electric cars (EVs) has suggested building an EV facility in India. According to the individual with firsthand information, there are also plans to produce EV batteries locally.

Tesla is “still testing the waters and trying to understand the local policies,” according to the individual, who wished to remain anonymous as the discussions were private.

One of the highest-ranking individuals Tesla spoke with during the tour was Rajeev Chandrasekhar, India’s deputy IT minister, according to a source in the Indian government. The visit’s specifics have not been made public by either the business or any Indian ministry.

An email request for comment from Tesla and the Indian IT ministry did not immediately receive a response.

According to the two sources, Karn Budhiraj, a top supply chain executive based in the United States, was part of Tesla’s team.

The conversations in India indicate a change in the U.S. electric car manufacturer’s position.

Talks with the Indian government came to a standstill towards the end of last year since the focus was on lowering the import duties on cars, which may be as high as 100%.

India wants Tesla to produce cars there, but the company claims it wanted to export first to gauge the strength of the market.

Recent discussions have touched on India’s import levies on vehicles, but have primarily focused on how Tesla could take advantage of a government programme, according to the first source.

Under two programmes, India has allocated about $6 billion to increase EV manufacturing and sales. The programmes allow automakers and battery producers to receive specific payback incentives for marketing and exporting locally made automobiles and auto parts.

“It appears Tesla has come with a different heart and head this time to take advantage of the auto boom (in India) … Tesla can negotiate on things like taxes better if it first sets up a plant,” said Mohan Shukla of New Delhi-based public policy advisory White Dolphin Media.

Tesla has stated that it wants to sell 20 million electric vehicles annually by 2030, a volume that would necessitate significant new investment in manufacturing battery packs and assembly lines.

Outside of the US, Tesla operates factories in Brandenburg, Germany, and Shanghai, which is its largest facility globally.

Along with India, Tesla has discussed prospective investments with officials in Indonesia and South Korea during the past year.

The third-largest vehicle market in the world is in India. The government of Prime Minister Narendra Modi has set an ambitious goal of increasing EV sales in India from 1% to 30% of all vehicle sales by 2030.

The talks between Tesla and India occur at a critical time for Modi, who is trying to lure investors ahead of the national elections he will be running for a third term in next year.

(Adapted from MoneyControl.com)

Categories: Economy & Finance, Entrepreneurship, Geopolitics, Regulations & Legal, Strategy, Sustainability

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