Tesla officials to visit in April to further India entry, meet govt officials

Tesla officials are set to visit India in April to review the company’s operations and engage with key government departments, including the Prime Minister’s Office (PMO), the Ministry of Heavy Industries, the Ministry of Road Transport and Highways (MoRTH), and the Ministry of Commerce, sources told Business Today.

Tesla has identified Maharashtra’s Chakan and Sambhaji Nagar, as well as Gujarat, as preferred locations for its manufacturing hub. The company is expected to make an initial investment of $3-5 billion to establish its production facilities, the source added.

TESLA MUST APPLY FOR EV MANUFACTURING SCHEME

To take advantage of lower import duties and government incentives, Tesla will have to apply for the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI). The policy, notified on March 15, 2024, is aimed at boosting local EV production.

Under this scheme, manufacturers are required to:

• Invest a minimum of Rs 4,150 crore in India
• Achieve at least 25% domestic value addition (DVA) by the third year
• Increase DVA to 50% by the fifth year

“If Tesla wants to benefit from the lower import duties, it will have to commit to manufacturing in India and invest in the local supply chain,” another source said.

In 2023, Tesla executives engaged with the Modi administration to discuss local component sourcing, leading to the company securing office space in Pune. Subsequent meetings between Elon Musk and Prime Minister Modi further fueled speculation about Tesla’s entry into India.

In 2024, India introduced a revised EV policy that offers import duty concessions to manufacturers committing at least $500 million in local investments. Musk was initially expected to announce Tesla’s investment plans during his scheduled April 2024 visit to India. However, he canceled the trip due to urgent business matters and instead traveled to China.

While India’s EV market remains relatively small compared to China — where 11 million electric cars were sold last year — it is gradually expanding. In contrast, India’s EV sales stood at nearly 100,000 units during the same period. Despite this gap, Tesla views India as a high-potential market, given the government’s push for clean energy and incentives to accelerate EV adoption.