Photographer: Angel Garcia / Bloomberg
Photographer: Angel Garcia / Bloomberg
Tesla Inc. concludes an agreement to produce electric vehicles in India for the first time, opening a new growth opportunity after the establishment of production in China.
Tesla has chosen Karnataka, a southern state whose capital is Bangalore, for its first factory, the chief minister said at the weekend. The carmaker has been negotiating with local officials for six months and is actively considering assembling the cars in the suburbs of Bangalore, said people familiar with the matter.
Tesla did not immediately respond to requests for comment and did not confirm the minister’s statement.
The company is conducting due diligence for office real estate in the region and plans to set up a research and development facility, people said, asking not to be named because the issue is private. Tesla has focused on Bangalore as it shapes itself up to to be a hub for electric vehicles and the aerospace manufacturer’s talent, they said. Tesla has incorporated its Indian unit and headquarters in downtown Bangalore.
However, CEO Elon Musk has confirmed that Tesla will enter India in January, after months of speculation. The richest man in the world on January 13th wrote on Twitter “as promised” in response to a reports on a Tesla-focused blog that the carmaker is in talks with several Indian states to open an office, showrooms, a research and development center – and possibly a factory.
The revelation sparked euphoria on the part of locals, such as Nikhil Chaudhary, a 20-year-old student at the University of Delhi who helped found India. Tesla fan club in 2019.
Despite the hype, Tesla’s foray into India could prove challenging. The country has not yet launched the welcome mat for electric vehicles such as neighboring China, where Tesla has set up its first factory outside the US and now dominates sales of premium electric vehicles.
Electric vehicles account for about 5% of China’s annual car sales, according to BloombergNEF, compared to less than 1% in India.
According to the International Energy Agency, about 60% of the world slow and fast loading public spots are in China. As Chinese carmakers launch competitive EV models and develop a diverse ecosystem, the country is “moving toward disrupting the current global landscape of the automotive industry,” UBS Group AG analysts wrote in a report last month.
A Model 3 vehicle is moving off the assembly line during a ceremony at Tesla’s Gigafactory in Shanghai in December 2019.
Photographer: Qilai Shen / Bloomberg
India has made similar moves, but not yet on the same scale.
In 2015, it launched a plan for faster adoption and manufacturing of the hybrid and EV (FAME), with a commitment of 9 billion rupees ($ 123 million) for subsidies covering everything from electric tricycles to buses, according to the IEA. A the second generation of the FAME program introduced in 2019 was larger, with 100 billion rupees to encourage the purchase of electric vehicles and build charging infrastructure.
India has also reduced the tax on goods and services on electric vehicles to 5% from 12%, starting in August 2019, much lower than the taxes of up to 28% on other vehicles, which have drawn criticism from some companies. like Toyota Motor Corp.
Read more: India has 150 million drivers and only 8,000 want electric cars
– With the assistance of Bruce Einhorn, Ragini Saxena and Vlad Savov