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Tesla vehicles heading to India, Musk drops a big hint


Elon Musk aims for Tesla’s EV entry in India with substantial investments. Govt regulations focus on local parts, duty for vehicles, with targets for job creation and economic boost.

Elon Musk today informed that it will be a natural progression for Tesla to provide electric vehicles (EV) in India. Musk’s statement came amidst reports about Tesla searching for a location to set up its factory in India. News agency ANI quoting sources earlier reported that Gujaratand Maharashtra have extended worthwhile land offers to Tesla Inc. for the establishment of an EV manufacturing plant. Telangana govt too is believed to be in talks with the EV giant for the same.

The proposed plant, with a projected investment in the range of USD 2 billion to USD 3 billion, aims to cater to both domestic and global demand for Tesla’s EVs. Earlier this year GOI announced a fresh EV policy, paving the way for Tesla to enter the country.

GOI’s EV scheme aims to position India as a preferred manufacturing nation for EVs equipped with advanced technology. Several key objectives are outlined inGOI’s EV scheme. These include drawing investments from reputable global EV manufacturers, encouraging the adoption of advanced EV technology among Indian consumers, and strengthening the country’s Make in India initiative.

By fixing minimum investment threshold at Rs 4150 crore (approx. USD 500 million) and encouraging manufacturers to accomplish significant levels of domestic value addition (DVA), GOI mandates that by the third year of establishment of the manufacturing unit, at least a quarter of the parts used to make the vehicles should be sourced from inside India. This localization level is anticipated to increase to 50 per cent by the fifth year of establishment.

For vehicles valued at USD 35,000 or above, a 15 per cent customs duty will be levied for five years if the manufacturer builds production units in India within three years. The total number of EVs permitted for import will be limited depending on the investment made or Rs 6484 crore, whichever is lower. If the investment surpasses USD 800 million, a maximum of 40,000 EVs can be imported, with not more than 8,000 per year. Unused import limits can be carried over to subsequent years.

Tesla’s entry into the Indian market holds huge promise for the nation’s economy and environment. Setting up of a manufacturing plant and increased procurement of auto parts from India is bound to create jobs, boost economic growth, and strengthen the domestic manufacturing ecosystem.


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