© Reuters. FILE PHOTO: The logo of automaker Tesla is seen at a branch office in Bern, Switzerland on Oct. 28, 2020. REUTERS/Arnd Wegmann/file photo/file photo
BENGALURU (Reuters) – Tesla has begun discussions with the Indian government on an investment proposal to set up a car factory in the country with an annual capacity of 500,000 electric cars, the Times of India reported on Thursday.
The report added that vehicle prices will start at two million rupees ($24,400.66).
The company, which is led by billionaire Elon Musk, is also considering using India as an export base as it plans to ship cars to countries in the Indo-Pacific region, the report said, citing government sources.
Tesla (Nasdaq) did not immediately respond to a Reuters request for comment.
Discussions with the Indian government show a shift in the US electric car maker’s strategy.
Last year, talks stalled after the Indian government refused to agree to a request by Tesla seeking to lower import taxes on cars, which could reach 100%.
India has been keen for Tesla to make cars domestically, but the company has said it wants to export its cars first so it can test the strength of demand.
In a renewed effort to enter the domestic market with a change of heart, Tesla held discussions in May with officials about incentives offered by the government to make cars and batteries, Reuters reported.
In a meeting with Musk last month, Indian Prime Minister Narendra Modi urged the automaker to make a “major investment” in the country.
Musk said after meeting Modi that India has strong potential for a sustainable energy future including solar power, stationary battery packs and electric vehicles, adding that he hopes to bring SpaceX’s Starlink satellite internet service to the country as well.
($1 = 81.9650 Indian rupees)