Tesla Offers Up To $2 Billion Investment In India with Conditions

Tesla is considering investing up to $2 billion in an Indian factory if the government grants a 15% concessional duty on imported vehicles for the first two years of operation. The company proposes a detailed plan tying investment amount to the number of cars eligible for lower duty. Tesla may invest $500 million with a concessional tariff for 12,000 vehicles, increasing to $2 billion if approved for 30,000 vehicles.

The government is evaluating the viability of the $2 billion investment for a plant. Discussions also involve limiting concessional tariffs to 10% of projected EV sales in the fiscal year, potentially increasing by 20% in the second year. The proposal is jointly assessed by various ministries, and Tesla aims to localize 20-40% of made-in-India cars.

India imposes 100% import duty on cars exceeding $40,000 and 70% on cheaper vehicles. Tesla plans to launch in India with Model 3, Model Y, and a new hatchback. The government may require a bank guarantee linked to the capital commitment. Tesla aims to source $1.7-1.9 billion worth of auto parts from India in the current year. The government emphasizes equal incentives for local production for both domestic and foreign players.

Source: The Economic Times