Elon Musk Reveals Conditions For Setting Up Tesla Manufacturing Plant In India

Tesla CEO and world's richest man Elon Musk has revealed the conditions that need to be met for Tesla to set up a manufacturing facility in India.

Elon Musk Outlines Conditions For Tesla's India Factory

As is the usual case with Musk and important topics, the world's riches man revealed his conditions for setting up a manufacturing plant in India on Twitter, another company that he is in the process of acquiring.

Elon Musk Outlines Conditions For Tesla's India Factory

In a conversation that started off with a question about Starlink's entry into India, Musk replied to twitter user Madhusudhan V's query about the chances of a Tesla manufacturing plant in India by stating "Tesla will not put a manufacturing plant in any location where we are not allowed first to sell and service cars."

Elon Musk Outlines Conditions For Tesla's India Factory

Musk and the Indian government haven't really been seeing eye to eye over the entry of Tesla into India. Rumours of Tesla coming to India have been swirling for quite a while now and Musk had stated last year that he would consider manufacturing cars in India provided Tesla succeeded with the sales of imported cars in India. Musk had stated that he wanted to officially launch Tesla in India but heavy import duties which the world's richest man described as the highest in the world by far for any large country.

Elon Musk Outlines Conditions For Tesla's India Factory

Tesla had asked the Indian government for a lowering of import duties on its vehicles but this move had been opposed by manufacturers already in India. These manufacturers had argued that the lowering of import duties would hurt investments into local manufacturing.

Elon Musk Outlines Conditions For Tesla's India Factory

The Indian Government stance on the situation with Tesla has been clear for quite a while - Invest in India and reap the benefits. Union Highways and Road Transport minister Nitin Gadkari has spoken multiples times on the situation. Gadkari has stated that Tesla would reap the benefits if it chose to manufacture its electric vehicles in India and that the company could use the country as an export hub.

Elon Musk Outlines Conditions For Tesla's India Factory

India's import duties are extremely prohibitive for carmakers looking to bring their cars into India. Currently cars imported as completely built units (CBUs) attract customs duties ranging from 60 to 100 per cent of their value. Cars whose value sits under $40,000 inclusive of cost, insurance and freight (CIF) attract a 60 per cent import tax. CBUs exceeding that value are slapped with a 100 per cent import tax.

Elon Musk Outlines Conditions For Tesla's India Factory

The current Indo-China situation also hasn't helped matters much. Gadkari has also stated that Tesla's entry into India was welcome but warned the world's most valuable automaker with a market capitalization against importing cars into the country from China. Telsa currently has production facilities in China and the United States.

Elon Musk Outlines Conditions For Tesla's India Factory

Thoughts On the Ongoing Tesla India Saga

Elon Musk's latest tweet on Tesla's entry into India is another indication that electric carmaker's arrival into India is not as close as many fans of the American EV company would like. With both sides standing firm on their respective positions, chances of Tesla's arrival and setting up of a manufacturing facility in India seem to be stuck in neutral.

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Article Published On: Saturday, May 28, 2022, 13:11 [IST]
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