India offers big incentives to Tesla to establish electric car factory in the country

India says that it is prepared to offer Tesla big incentives to establish an electric car factory in the country and beat Chinese prices.

Over the last few months, there have been more rumors of Tesla looking to establish manufacturing and/or research and development in India.

Local government officials have revealed talks with Tesla executives, and last month, Tesla officially incorporated an Indian company in Bengaluru, the capital of India’s southern Karnataka state.

Last month, Tesla even registered a business unit in India – confirming that something is happening.

Nitin Gadkari, India’s transport minister, is now commenting on the situation and dangling some incentives to reduced costs (via Reuters):

“The government will make sure the production cost for Tesla will be the lowest when compared with the world, even China, when they start manufacturing their cars in India. We will assure that.”

The government official didn’t elaborate on what form those incentives would take.

When Tesla enters a new market, it generally starts by importing its vehicles into the market, but India has been pushing for Tesla to enter the market by producing its vehicles in the country.

Gadkari commented:

“Rather than assembling (the cars) in India they should make the entire product in the country by hiring local vendors. Then we can give higher concessions,”

The government has been teasing that the project with Tesla is moving forward, but the company has yet to announce anything.

Electrek’s Take

He mentioned China, which is serving as a great example for India when it comes to Tesla.

Tesla’s deal with China to build Gigafactory Shanghai was a win-win for the company and the country.

It helped Tesla grow rapidly in the market and accelerate electric vehicle adoption in China, which is the biggest EV market in the world.

India is playing catch up when it comes to electric vehicles.

In 2020, 2.4 million cars were sold in India, and only 5,000 of them were electric.

The country is hoping that Tesla can help them accelerate EV adoption in the country, like it did in China.

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