In an interview with Wall Street Journal, Musk said that the automaker would probably pick a location for a new factory by the end of this year. When asked whether India was an interesting place to set up a new factory, Musk said, “Absolutely”.
Tesla’s ‘India’ problem
This is not the first time that Tesla has shown a desire to establish a manufacturing base in India. However, the buck stops at the country’s stance on import tax on cars. Last year, India refused to agree to Tesla’s request to lower the import tax on cars, which can reach as much as 100%. India wants Tesla to build vehicles locally but the carmaker wanted to test the demand in the market first with imports.
Outside the US, Tesla has a plant in Shanghai, which is its largest factory globally, and one in Brandenburg, Germany. Earlier this year, Tesla announced that it would open a gigafactory in Mexico as a part of its push to expand its global output.
Tesla ‘serious’ about factory in India
Musk’s comments came after the IT minister said that Tesla was serious about its plans to establish a manufacturing base in India.
Recently, Tesla proposed setting up a new factory without specifying a location or investment, news agency Reuters cited a source with direct knowledge of the matter as saying. Tesla, however, did not discuss lower import taxes with Indian officials, the report said.
Last year, Tesla put on hold its plans to sell electric cars in India, abandoned a search for showroom space and reassigned some of its domestic team after failing to secure lower import taxes, a report by Reuters cited three people familiar with the matter as saying.