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Elon Musk to meet PM Modi in India this month and announce Tesla plant, company starts making cars for India in Germany instead of China

Tesla already makes right-hand drive cars in its Shanghai plant in China, but it has started RHD cars for India in Germany, as Modi govt has made its 'no Chinese car' policy clear to the company

The proposed Electric Vehicle plant by Tesla in India seems to be gaining momentum, as Elon Musk is visiting India next month to meet prime minister Narendra Modi. As per a report by Reuters citing two sources with direct knowledge of the matter, the plans to invest in a new Tesla car factory in India will be announced during this visit.

Musk will meet PM Modi in the week beginning 22 April, and will separately announce the plans of his company for India. The Tesla CEO will be accompanied by other executives during his visit, as per the report. However, detail agenda of the visit was not disclosed by the sources as they are confidential.

Reuters said that PM Modi’s office and Tesla did not respond to requests for comment. If the visit takes place as per the report, it will be in the middle of the Lok Sabha elections, after which PM Modi is set to return for a third term.

Confirming the visit, Elon Musk tweeted on Wednesday night (India time), “Looking forward to meeting with Prime Minister @NarendraModi in India!”

The report of Elon Musk’s India visit comes amid speculations that Tesla is in talks with Reliance Industries of Mukesh Ambani for a joint venture to set up the EV plant in India. According to a report in The Hindu Business Line citing sources earlier today, the talks for a joint venture between Billionaires Elon Musk and Mukesh Ambani are currently in the initial stages.

Notably, last week Financial Times reported that Tesla is sending a team to scout for sites in India for the upcoming plant. The report claimed that the company is focusing on states that already have automobile manufacturing hubs as well as ports to facilitate export, and as a result, states like Maharashtra, Gujarat, and Tamil Nadu are on high priority for the company.

Tesla is expected to invest 2 to 3 billion USD in its Indian operations. Apart from the car plant, the company will also set up a gigafactory to make batteries.

Notably, although Tesla has been planning to enter the Indian market for years, it could not do the same due to high import duty on cars. However, the company resumed talks with the Indian govt last year. The talks were accelerated after PM Modi met Elon Musk in New York in June last year during his US visit.

After the meeting, Musk had said, “I am planning to visit India next year. I am confident that Tesla will be in India and we will do so as soon as humanly possible. I would like to thank PM Modi for his support and hopefully, we will be able to announce something in the future.”

Tesla’s Indian entry has been confirmed after the Indian govt slashed import duty on electric vehicles to just 15%. The Modi govt announced a new EV policy last month, saying that it will allow automakers to import up to 8,000 EVs priced $35,000 or higher every year at an import duty of 15%, reduced from 70% earlier. However, the carmaker will have to commit to investing at least $500 million in India over the next three years.

Ahead of  building its plant in India, Tesla has already started production of right-hand drive cars at its plant in Germany for export to India later this year, a Reuters report said earlier this week. The company will start its Indian business with imported cars, as production of cars will take time. Although it was not confirmed which model will be imported into India, the Berlin plant only makes the Model Y.

Choice of Berlin plant to make the cars for India is significant, because Tesla already makes right-hand drive cars in its much bigger Shanghai plant in China, for right-hand drive countries such as UK, Australia and Japan. The company started making RHD cars in Berlin specifically for India. One of the points preventing Tesla’s entry into India for several years was the Modi government’s insistence that the company can’t import cars into the country from China.

Earlier it was reported that Tesla will be introducing a new low-cost car aimed at developing markets such as India and Brazil, however this week Reuters reported that the company has scrapped that proposal. The company was planning a new car at around $25,000, around ₹21 lakh. The report stated that increased competition from cheaper Chinese EVs prompted this decision.

The current cheapest Tesla model is the Model 3 Sedan, with a price of around $39,000 in the United States, equivalent to around ₹32.5 lakh. Model Y retails for above $45,000, while the prices of Model S and Model X are above $75,000. The price of newly launched Cybertruck ranges from $80,000 to above $100,000.

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