Tesla Aims To Enter The Indian Market With EVs Made In Germany

These German-made Tesla EVs will serve as a stopgap before local production in India begins. 

While there has long been rumours of Tesla potentially entering the Indian market, it would seem that this possibility might finally soon become reality by the end of 2024. And perhaps the most interesting thing regarding the American EV manufacturer’s arrival into the world’s third largest market is for its products to be rumoured to arrive from Germany, before it eventually sets up a local production site over there. 

This rumour of Tesla making cars in India from its German site is interesting for the fact that the EV manufacturer’s primary right-hand drive production location is its Shanghai gigafactory. This Chinese manufacturing site has historically handled production of such vehicles, with it then being exported to locales such as Australia, UK and Japan.  

It is currently not immediately clear which model Tesla plans to export to India, but the Model Y is the only EV that is currently being produced at its Berlin gigafactory. Though given that the production will likely required to be overhauled in preparation of right-hand drive, there could be a possibility for its recently refreshed Model 3 to be made over there too.

In regards to Tesla’s plans for local assembly in India meanwhile, the current word on the street is for the automaker to be sending a team to scout for potential sites later this month. Sources within the company have indicated that among the sites considered for its factory is the southern state of Tamil Nadu, Maharashtra in the west, and Prime Minister Modi’s home state of Gujarat. 

Tesla’s Indian entry plan apparently includes investment into establishing a charging network, which will come on top of a manufacturing site that will apparently cost $2 billion (RM 9.5 billion), in addition to the potential of sourcing more components locally. Its push into India comes at a time when slowing EV demand in its main U.S. and China markets that coincides with intensifying competition from Chinese players, which has since caused it to report a drop in its first-quarter deliveries and miss estimates.

India last month slashed the import tax rate on certain electric vehicles if their makers invest at least $500 million (RM2.36 billion) in the country and start production there within three years, with automakers able to import up to 8,000 cars annually at a lower tax rate under this new policy. The move is seen as a win for Tesla, which had lobbied for months for lower taxes, but faced resistance from local automakers.

The EV market in India is currently small but growing, with the government over there ambitiously aiming to skyrocket sales of electric models from the 2% of total car sales in 2023 to 30% by 2030. Tata’s Nexon.ev e-crossover is currently the best selling EV in India, with it packing a decent 453 km range from a reasonable price tag of Rs. 14.49 Lakhs (RM 83,000). 

Joshua Chin

Automotive journalist. Professional work on and Personal writing found at Instagram: @driveeveryday

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