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Tesla reportedly held discussions with Indian officials on auto incentives, others

Tesla reportedly held discussions with Indian officials on auto incentives, others
Tesla is “testing the waters” before entering the Indian market.


Tesla, an American automobile company owned by billionaire Elon Musk, held discussions with Indian officials about incentives offered by the country for its cars and battery manufacturing, according to a Reuters report. The development comes just a day after the media organization reported that Tesla has proposed setting up a production facility in the country for the domestic sale and export of its electric cars.


The automobile company is “still testing the waters and trying to understand the local policies,” the media organization reported, quoting an unnamed source. The company’s executives also met India’s IT minister Rajeev Chandrasekhar on Thursday, it said; adding that Tesla’s delegation included the company’s vice-president supply chain Karn Budhiraj. There has been no official confirmation either from the Indian Ministry or Tesla.


Meanwhile, this is not the first time the company is discussing its plans to expand its foot in India. In the past, Tesla chief executive officer Elon Musk has shown enthusiasm for bringing its vehicles to India and acknowledged that the EV maker was thinking about opening a factory in the country last year. Musk-led company took a significant step towards entering the Indian market and established a subsidiary in the country in 2022 and even registered an office in the southern Indian city of Bengaluru.


However, in May last year, the company said to put a hold on its expansion plans in the country after it failed to secure lower import taxes from the government. Following this, Tesla abandoned a search for showroom space and reassigned some of its domestic team, Reuters reported.


At that time, the Indian authorities insisted that the American company start opening a manufacturing facility in the country and assemble its cars locally. Until then, the EV maker was asked to pay high import tariffs which reportedly run as high as 100% on imported vehicles. Tesla, on the other hand, sought lower taxes and demanded to first test the demand in the country by selling its cars imported from its existing production hubs in the U.S. and China.


While Musk has mentioned in the past the high potential of the Indian market and the importance of sustainable transportation solutions, he also made it clear that Tesla “will not put a manufacturing plant in any location where we are not allowed first to sell & service cars.”


While in the latest talks, Tesla reportedly touched on the topic of import tax, the company mainly centered the discussion on how it could make use of a government scheme.