Musk's Visit to India Fuels Anticipation for Tesla's Investment and Expansion

By siliconindia  |  Friday, 19 April 2024, 08:44:26 AM IST

Musk's Visit to India Fuels Anticipation for Tesla's Investment and Expansion
Elon Musk is set to embark on his first visit to India with a focus on exploring investment prospects. According to sources, the visit aims to potentially facilitate Tesla's procurement of more components from India for its manufacturing plants in Germany and Fremont. Scheduled to meet with Prime Minister Narendra Modi and engage with India's thriving space technology startups on April 22, this visit underscores Musk's interest in tapping into India's burgeoning market and technological expertise. "Discussions are also expected to encompass investments in electric vehicles [EVs], space exploration, and satellite-based services", sources said.
The EV market in India, though currently modest, is showing signs of growth, with Tata Motors emerging as a key domestic player. In 2023, electric vehicles (EVs) constituted merely 2 percent of total car sales. Nevertheless, the government has ambitious plans to bolster this sector, aiming for EVs to make up 30 percent of new car sales by 2030. Musk's upcoming visit aligns with Tesla's strategy to navigate sluggish sales in its primary markets of the United States and China.
Specifics regarding Musk's visit to India are being kept under wraps, with the CEO only confirming via his social media platform X that he will meet with PM Modi during his trip. Sources indicate that Musk is poised to unveil an investment ranging from $2 to $3 billion in India, alongside Tesla Inc's highly anticipated debut in the country. However, the announcement is anticipated to lack detailed specifics.
"Expect a general announcement that the US-based EV maker is coming into India, not a site-specific one. To announce a specific site, Tesla typically needs board approval, which may happen only later. For now, Musk may welcome the EV policy and express eagerness to enter the Indian market soon", an official was quoted. 
Musk and PM Modi's most recent encounter took place in New York in June. Tesla had been engaged in months-long efforts to persuade India to reduce import duties on electric vehicles (EVs), while simultaneously contemplating establishing a manufacturing facility within the nation. In the previous month, the Indian government introduced a fresh EV policy, significantly slashing import tariffs from 100 percent to 15 percent on select models, contingent upon a manufacturer investing a minimum of $500 million and establishing a factory. Musk's visit coincides with India's general elections.
Tesla has initiated the search for showroom locations in both New Delhi and Mumbai. Furthermore, its Berlin factory has commenced the production of right-hand drive vehicles intended for export to India, slated to commence later this year. Musk is also expected to participate in an event in New Delhi organized by the Indian government, alongside space startups, as indicated by two sources familiar with the matter.

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