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Tesla is planning to make a significant investment in India, Reuters has reported, citing a local media partner following a meeting between CEO Elon Musk and Indian Prime Minister Narendra Modi.
"He (Modi) really cares about India because he's pushing us to make significant investments in India, which is something we intend to do," Musk said, adding "I am confident that Tesla will be in India and will do so as soon as humanly possible."
Last year, EV sales in India rose to 50,000, which was a fourfold increase from 2021 but still a meager number compared to the 1.4 million EVs sold in China in the same year. According to the International Energy Agency, however, sales of electric vehicles in India have the potential to really take off.
The Indian government has poured some $3.2 billion in the form of incentives for the industry, CNBC reported earlier this year, attracting $8.3 billion in investment. Some of the world’s biggest carmakers including VW, Volvo Cars, and Stellantis, are venturing into the EV market on the subcontinent. It was only a matter of time for Tesla to join the crowd.
“I think [the] four-wheeler industry is one [area], but you also will have two-wheeler industry, even buses on the electric side that will come, and also three-wheelers,” the head of Audi India, Balbir Singh Dhillon, told Autocar India last year.
“So I think the whole ecosystem is going to develop at a much faster pace than we can imagine,” he added at the time.
Indeed, Tesla had plans to set up shop in India last year but scrapped those plans when the Modi government refused to lower import taxes on cars—these taxes in some cases reach 100%, which would make Teslas prohibitively expensive. The idea of the government was to motivate Tesla to manufacture cars locally rather than import them.
Based on the comments following the meeting between Musk and Modi, the differences have been resolved, as suggested earlier, when Tesla returned to India to negotiate setting up a factory with the government, per a Reuters report from May.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com