India wants to offer the electric car maker Tesla such high incentives that it can build its cars there more cheaply than anywhere else in the world. “We will guarantee that,” said Transport Minister Nitin Gadkari of the Reuters news agency. “The government will ensure that Tesla production costs will be the lowest in the world, even compared to China – when they start building cars in India.” He urged Tesla not only to assemble the vehicles in India, but to manufacture “the whole product” by involving local suppliers in the country. “Then we can make bigger concessions,” he offered. What kind these could be, he left open.
A few weeks ago, Tesla had registered a company in India under its boss Elon Musk. That was seen as a step towards market entry perhaps as early as the middle of this year. Insiders had said that Tesla wanted to start importing and selling its “Model 3” model.
The transport minister said India was attractive because, as a large market, it could also be a hub for exports – especially because 80 percent of the shares for lithium-ion batteries are now produced locally. “It's a win-win situation for Tesla.”
Hardly any electric cars in India
But it won't be easy for India to convince Tesla of its ideas. In 2020, only 5,000 electric cars were sold there. There are very few charging points and the prices for electric vehicles are high. The country is currently in the process of creating incentives for car manufacturers and suppliers. But that is not yet dry. India wants to bring the construction of electric cars, batteries and other components into its own country, also to avoid expensive imports. The cars themselves should help to keep the air cleaner, especially in big cities.
Tesla currently only produces its vehicles in the United States and China. A factory is under construction in Grünheide near Berlin, which should be ready in mid-2021. Up to 500,000 vehicles are expected to roll off the assembly line there every year.
