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The Vibrant Gujarat Summit, slated for January 2024, is poised to be the platform where the negotiation for the establishment of the first electric vehicle supply system manufacturing unit of Tesla (NASDAQ:TSLA) in India is in the final stages and is likely to conclude soon, according to multiple media reports.
As per The Economic Times, Musk is confident about India and has considered Gujarat as a location for its Tesla India plant. However, the announcement isn’t official.
The presence of Tesla CEO Elon Musk and Prime Minister Narendra Modi is anticipated to grace the event, ET reported.
However, so far, there has been no official announcement by the EV maker or the state government on the matter.
During a recent Cabinet briefing, the Gujarat government, represented by spokesperson Rushikesh Patel, expressed optimism about Tesla’s potential investment in the state. Despite high tariffs on EV imports in India, Tesla has shown a willingness to invest up to $2 billion in setting up a local factory, contingent on a concessional duty of 15% on imported vehicles during the plant’s first two years of operation.
Earlier in November, Tesla was willing to invest up to $2 billion to set up a local factory in India if the government were to provide a concessional duty of 15 percent on imported vehicles during its first two years of operations in India.
The substantial import taxes imposed by India have posed a significant obstacle to Tesla’s entrance into the market. At present, the country imposes up to 100% duty on luxury cars, which sharply contrasts with Tesla’s plea for a preferential 15% duty.
The negotiation is not just about bringing Tesla cars to Indian roads but also about stimulating the local EV ecosystem, with Tesla proposing to localize up to 20% of car components within two years, scaling to 40% in four years, as per the reports.
Tesla aims to introduce the Model 3, Model Y, and a new, more affordable hatchback to the Indian market. With concessional import duty, the prices of these models could be significantly reduced, making them more accessible to Indian consumers, the reports added.