NEW DELHI: US electric carmaker Tesla, whose entry into the Indian carmaker is now imminent, is scouting for showroom locations in key metro cities as it plans to sell German-imported cars by the end of this year.
Tesla may first look to establish its presence in two of the biggest auto markets in India – Delhi and Mumbai – and then move to other key cities, said a person aware of the development. Besides showrooms, Tesla would have set up its dedicated service centres.
The hunt for showroom location comes as Tesla Chief Executive Officer Elon Musk is all set to meet Prime Minister Narendra Modi during his 2-day visit to India starting from Sunday. It is expected that Musk will make Tesla’s proposed investment announcement following his meeting with the PM.
Before the Musk’s arrival, Tesla has struck a strategic deal with Tata Electronics to acquire semiconductor chips for its global operations. So far, neither Tesla nor Tata Electronics, Tata Group’s semiconductor manufacturing arm, has made any announcement on this.
An announcement by Musk to set up a base in India will boost PM Modi’s make-in-India initiative ahead of the crucial general election 2024. The market is also abuzz with announcements related to Starlink’s entry into the Indian market.
According to industry sources, Tesla is sending a team to India to search for locations for a proposed $2 billion to $3 billion electric car plant. The team is said to have started discussions with the state governments in Gujarat, Maharashtra, UP and Telangana for the proposed investment. A few other state governments are also aggressively luring Tesla to consider them.
It has already begun production of right-hand drive cars in its Germany plant to test the Indian market after the government last month slashed import duty on EVs for manufacturers who are willing to invest here. India is now allowing the import of completely built-up (CBU) electric cars that have a minimum cost, insurance and freight (CIF) value of $35,000 at 15% import duty for a period of 5 years. At present, CBU vehicles priced at more than $40,000 attract a 100% duty while those below $40,000 are subject to 70% tax.