Tesla Firms Up Plans For $30 Bn Investments To Set Up Base In India

Tesla Firms Up Plans For $30 Bn Investments To Set Up Base In India

In a potential game-changer for India's automotive landscape, Tesla is reportedly in advanced talks to enter the market with a massive $30 billion investment over the next five years. This ambitious plan, confirmed by sources close to the company, could propel India into a global manufacturing powerhouse and cement its position as an electric vehicle (EV) leader.

$30 Billion Investment: Tesla aims to pump in $3 billion directly for a new small car production plant, another $10 billion from partners to support the ecosystem, and an additional $15 billion in the battery industry over five years.

Made-in-India Cars for the World: The planned small car, designed for affordability and local content, targets markets across Asia, Africa, and Latin America.

Domestic and Export Focus: Alongside local sales, Tesla envisions significant exports from the Indian facility, capitalizing on its strategic location and infrastructure.

Beyond Automobiles: Tesla's ambition goes beyond cars, aiming to contribute to India's critical minerals mining, semiconductor manufacturing, and design capabilities.

Government Support: India's EV30@30 mission and supportive policies signal a conducive environment for Tesla's entry, although import duty concessions remain under discussion.

Beyond Numbers: A Potential Transformation:

Experts consider Tesla's potential entry a "Suzuki moment" for India's EV industry, echoing the transformative impact Maruti-Suzuki had on the small car segment decades ago. Additionally, it is seen as an "Apple plus moment" for manufacturing aspirations, surpassing Apple's foray by encompassing a broader ecosystem.

Motivations and Strategies:

Tesla's decision stems from its diversification strategy beyond China and Elon Musk's admiration for India's progress under Prime Minister Narendra Modi. The company identifies four possible locations for the plant, likely favoring a coastal state for export convenience. Drawing from its rapid plant construction experience in Germany and China, Tesla aims to roll out the first car within two years and complete the entire facility within three.

Potential Impact:

Advocates highlight that Tesla's investment could:

  • Boost local manufacturing and create high-skilled jobs.

  • Advance India's climate change goals by promoting EV adoption.

  • Integrate India into global supply chains for critical technologies.

  • Strengthen the strategic partnership between India and the US.
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January 14, 2024

Kalpana Maurya