Tesla’s first India manufacturing plant likely to be set up in Gujarat: Report

Electric vehicle (EV) manufacturing giant Tesla is likely to establish its first local India manufacturing plant in Gujarat, reported Ahmedabad Mirror.

An announcement is likely to be made during the Vibrant Gujarat Summit scheduled for January 2024, with Tesla CEO Elon Musk likely to be present for the occasion.

As per the report, Gujarat’s strategic advantages, including its favourable business environment and strategic location, have positioned it as the preferred destination for Tesla’s manufacturing endeavours.

It added that the state government has proposed multiple locations, including Sanand, Dholera, and Becharaji, as potential sites for the Tesla plant. This move aligns with Tesla’s goal of addressing both domestic and international demands, including exports, from its Indian manufacturing base.

Speculation about Tesla’s entry into the Indian market has been circulating for some time, with discussions ongoing between the company and the Indian government regarding concessions and regulatory considerations.

While the government’s official stance is that no subsidy will be provided on imports of EVs, recent reports suggested that Tesla may be granted the ability to import fully-built cars at a concessional import duty of 15-20 per cent, a significant reduction from the current 100 per cent duty on such imports.

However, this concession hinges on Tesla establishing a manufacturing presence in India, and failure to meet this condition could result in the revocation of duty benefits.

While Tesla’s potential entry has generated excitement, some Indian EV manufacturers, including Tata Motors and M&M, have raised questions about providing special treatment to the American automaker. They highlight their ongoing contributions to the Indian automotive landscape and manufacturing of electric vehicles within the country.

Gujarat, already home to manufacturing facilities for major automakers such as Maruti Suzuki, Tata Motors, and MG, further solidifies its position as a key hub for the automotive industry.