• Thursday, May 23, 2024

Business

Elon Musk’s Tesla to scout sites in India for $3 billion EV plant: Report

Tesla on Tuesday posted a decline in quarterly deliveries for the first time in nearly four years. (Photo credit: Getty Images)

Vivek MishraBy: Vivek Mishra

Tesla will send a team from the United States to India by late April to study sites for a proposed $2 billion to $3 billion (£2.4bn) electric car plant in the country.

The Financial Times reported that Tesla would send a team to study sites for the plant, focusing on states with existing automotive hubs, including Maharashtra and Gujarat in the west and Tamil Nadu in the south.

The company’s reported push into India comes at a time when electric vehicle (EV) demand is slowing in its main markets of the US and China while competition there is heating up, reported Reuters.

Tesla on Tuesday posted a decline in quarterly deliveries for the first time in nearly four years and missed Wall Street estimates. It also led to huge drop in shares of Musk’s company, losing about $30 billion (£23.7bn) in market value, reported Reuters.

Musk, after meeting Prime Minister Narendra Modi last year had said he plans to visit India in 2024. “We don’t want to jump the gun on an announcement, but I think it’s quite likely that it will be a significant investment, a relationship with India,” he had said.

India has been pitching as an alternate destination for investment for US companies as the relations between Beijing and Washington have been deteriorating.

Tesla has told Indian officials it is considering building a smaller car in the proposed new factory than its current models, which would be priced at less than $30,000 (£23,675). It could then sell the model in India and export to south-east Asia, the Gulf, Africa, and southern and eastern Europe, reported the Financial Times.

Tesla is developing a cheaper vehicle, “Model 2”, to go on sale late next year, but has not yet said where the car will be manufactured.

India last month lowered import taxes on certain EVs produced by automakers that commit to invest at least $500 million and start domestic manufacturing within three years, reported Reuters.

According to Fortune Business Insights, the Indian electric vehicle market is projected to grow significantly, with estimates suggesting a compound annual growth rate (CAGR) of 66.52% from 2022 to 2029.

Earlier this year in January, Vietnamese electric vehicle (EV) maker VinFast signed an agreement to set up its first manufacturing facilities in India. VinFast and the state of Tamil Nadu agreed to work toward an investment of up to $2 billion, with an intended commitment of $500 million for the first five years of the project, reported PTI.

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