India wants to boost local manufacturing of electric vehicles (EVs), batteries and other components to cut expensive imports and curb pollution in its major cities. India plans production incentives for auto and auto component manufacturers
Transport Minister Nitin Gadkari told Reuters that Tesla Inc’s production costs in China would be lower if the carmaker talks about building its electric vehicles in the South Asian country. Billionaire Elon Musk’s Tesla marks a step towards registering a company in India, which is likely to happen as early as mid-2021. Sources familiar with the matter said that Tesla plans to start importing and selling its Model 3 electric sedan in India.
Gadkari said in an interview, “Instead of cars (cars) in India, they should make entire products by hiring local vendors. Then we can make higher concessions.”
He added, “The government will ensure that production costs for Tesla will be the lowest compared with the world, even China, when they start manufacturing their cars in India. We will assure that,” he said.
Sources familiar with the matter said that Tesla plans to start importing and selling its Model 3 electric sedan in India. India wants to boost local manufacturing of electric vehicles (EVs), batteries and other components to cut expensive imports and curb pollution in its major cities.
It comes amid a global race by car manufacturers to jump-start EV production as countries work towards cutting carbon emissions.
But India faced a major challenge to win a production commitment from Tesla, which did not immediately respond to emails requesting comment about its plans in the country.
The runaway EV market in India accounts for just 5,000 out of the total 2.4 million cars, due to the negligible charge infrastructure sold in the country last year and the high cost of retaliatory buyers of EVs.
In contrast, China, where Tesla already manufactures cars, sold 1.25 million new energy passenger vehicles, including EVs, out of total sales of 20 million in 2020, and accounted for more than a third of Tesla’s global sales. .
India also lacks a comprehensive EV policy like China, which is the world’s largest auto market, forcing companies to invest in the sector.
Gadkari’s pitch came weeks after billionaire Elon Musk’s Tesla recorded a step towards entering the country
Gadkari said that being a large market, India could be an export hub, especially as about 80% of components for lithium-ion batteries are now being manufactured locally.
“I think it’s a win-win situation for Tesla,” Gadkari said.
India is preparing a production-linked incentive plan for setting up advanced battery manufacturing units, along with auto and auto component manufacturers, but details are yet to be finalized.
Switching to clean sources of energy and reducing vehicle pollution are considered essential for India to meet its Paris Agreement’s climate commitments.
India introduced tougher emission regulations last year for car manufacturers to bring them up to international standards. It is now considering tightening fuel efficiency regulations from April 2022, which industry officials may force some automakers to add electric or hybrid vehicles to their portfolio.