Tesla, which may invest up to $3 billion, will look at sites in India this month to build an electric vehicle (EV) factory, less than a year after Elon Musk and PM Modi first met. Prime Minister Narendra Modis goal of boosting indigenous industry is in line with this growth. The proposed factory might cost between $2 billion and $3 billion, according to the Financial Times. Tesla is considering locating its production in one of the states that are already well-known for being automotive hubs: Maharashtra, Gujarat, or Tamil Nadu.Indias MoveIndia has lowered import taxes on certain EVs for businesses willing to invest at least $500 million in local production over the past three years to encourage these kinds of investments. The Indian government has stated that it wants to establish the nation as an epicenter for the production of the latest electric vehicles.The outcome of PM Modi and Elon Musks meetingDuring their June meeting, Prime Minister Modi extended an invitation to Tesla CEO Elon Musk to explore investment prospects in India. A production-linked incentive scheme was launched by India in 2021 for the automobile sector, with a budget of 25,938 crore rupees ($3.1 billion) spread over five years to promote domestic production and reduce reliance on imports. This program was extended at the beginning of the current year.Analysts CommentAnalysts believe that Tesla is an especially attractive electric car maker for India because of its substantial worldwide expansion initiatives and ability to grow the ecosystem for EV manufacturing. Increased incentives in the form of the recently amended Indian EV legislation present an appealing prospect for Tesla to forge a significant foothold in the nation.First in the competitionTeslas decision comes amid strong competition, especially from Chinas BYD, which briefly overtook Tesla in EV sales to secure the top spot globally. Chinas EV sector, which accounts for around 60% of all EV sales worldwide, has witnessed severe pricing wars and competition between manufacturers like Xiaomi, Xpeng, and BYD.
