This year, Tesla commences manufacturing cars in Germany for export to India.

SUMMARY

⏺ Tesla is revving up its India entry with multiple initiatives. They are producing right-hand drive cars (possibly Model Y) at their Germany plant for India, scouting locations for a $2 billion manufacturing unit in Maharashtra, Gujarat or Tamil Nadu, and planning a dedicated charging network across the country.

⏺ This aggressive entry coincides with a growing Indian EV market, driven by government incentives and record electric two-wheeler registrations (1.36 lakh in March 2024). The Indian government has also reduced import duties on EVs for manufacturers who set up local plants, making India an attractive destination for Tesla.

Electric vehicle (EV) giant Tesla is accelerating its foray into the Indian market. According to Reuters, Tesla has reportedly begun producing right-hand drive (RHD) cars at its factory in Germany, specifically targeting the Indian market later this year.

India-Bound Tesla Cars in Production

Sources close to the company revealed that Tesla has initiated production of RHD vehicles, a strong indication of their commitment to the Indian market. While the specific model slated for India remains unconfirmed (current production at the Berlin facility focuses on the Model Y), this move signifies Tesla's strategic shift to cater to right-hand drive markets outside of China.

Reduced Dependence on China, Increased Focus on India

The report suggests that Tesla intends to diversify its production base, reducing its reliance on China and potentially establishing India as a major sourcing hub. This aligns with reports of Tesla increasing its import of parts from India.

Charging Network and Manufacturing Plans

Beyond vehicle production, Tesla is reportedly prioritizing the development of a dedicated charging network across India to provide essential infrastructure for EV adoption. This focus on infrastructure development underscores Tesla's long-term vision for the Indian market.

Site Scouting Mission and Government Support

These developments follow earlier reports of a Tesla team visiting India later this month to scout potential locations for a $2 billion manufacturing plant. Maharashtra, Gujarat, and Tamil Nadu are the frontrunners for hosting this facility, with an estimated timeframe of two years for completion.

Meanwhile, Telangana has also expressed interest in attracting Tesla, with state authorities actively engaging with the company. The Indian government has further emphasized its support by lowering import duties on EVs for manufacturers like Tesla who commit to establishing domestic production facilities.

Government Creates Favorable Environment

DPIIT Secretary Rajesh Kumar Singh highlighted the government's proactive approach in attracting EV manufacturers. "The ball is now in Tesla's court," Singh stated, citing the recent policy revisions and ongoing discussions at both central and state levels to facilitate Tesla's entry. He also pointed to the successful entry of other EV manufacturers like VinFast, hinting at India's growing appeal in the global EV landscape.

EV Market on the Rise in India

Tesla's intensified focus on India coincides with a period of burgeoning EV adoption within the country. Government incentives and production-linked incentives (PLIs) have spurred a rise in EV sales, particularly in the two-wheeler segment, with March 2024 recording a record-breaking 1.36 lakh electric two-wheeler registrations. Ola Electric currently leads the charge in this segment.

Tesla's entry into the Indian market is poised to be a game-changer, potentially accelerating EV adoption and contributing to a more sustainable transportation future for India. The company's strategic approach, encompassing both vehicle production and charging infrastructure development, demonstrates its commitment to becoming a major player in the Indian EV landscape.