Electric vehicle maker Tesla has begun discussions with the Indian government to set up an electric car factory in the country, according to local media reports.
The Times of India reported that Tesla wants to invest in an Indian factory that would have an initial annual capacity of 500,000 electric vehicles. The report says Tesla aims to price its electric cars starting at 2 million Indian rupees, or around $25,000.
Tesla did not confirm the talks with Reuters but the reports indicate a shift in Tesla's strategy for India. Last year, talks between Tesla and the Indian government stalled after Tesla sought lower import taxes for its overseas-made cars.
India wanted Tesla to manufacture cars locally but Tesla said it wanted to first test demand by exporting to India.
However, in renewed efforts to enter the Indian market, Tesla held discussions last month with government officials about incentives being offered for EV and battery manufacturing.
Indian Prime Minister Narendra Modi pushed Tesla during a meeting last month to make a "significant investment" in India. Modi said India has strong potential for solar power, batteries and electric vehicles.
If confirmed, a Tesla factory in India would mark a major step in the company's global expansion plans. It would give Tesla access to a huge market for electric vehicles as India pushes to reduce its oil dependence and air pollution.
In summary, reports indicate Tesla is in talks with the Indian government to set up an electric vehicle factory in India. The potential factory could have a high production capacity and target price points as low as $25,000 - aiming to make EVs more accessible for the Indian market. While Tesla had previously sought tax breaks to import cars to India, it now seems open to local manufacturing - which the Indian government has been pushing for. A Tesla factory would be a major boost for India's nascent electric vehicle sector.
