India on Elon Musk’s radar as Tesla hunts for factory site

TECHNOLOGY DESK: Days after a team from Tesla visited India, the company’s founder and CEO Elon Musk has indicated that India is on the electric car manufacturer’s radar to set up a new factory.

In an interview to the Wall Street Journal, Musk said that the electric carmaker will pick a fresh location for a new factory by the close of this year, and added that India could be an interesting proposition for such an expansion.

Asked which would be the most exciting country to build a Tesla plant right now, Musk said, “We did make an announcement that Mexico would be our next location outside the US. We’ll probably pick another location towards the end of this year.”

On whether India will be an “interesting” contender for this move, he said, “Absolutely.”

Musk’s words, even while being non-committal on India, set off speculations that the electric carmaker may finally be looking at the country seriously, especially as he has previously expressed his desire to launch his cars here even while complaining of “challenges” and high import duty in doing so.

The visit by Tesla’s team just a week back has only strengthened the buzz, which is also gaining credence as the government has also been open about getting the company to India. Earlier, the company had sought reduction in import duties to ship cars into the country on a test basis.

Last week, minister of state for IT & electronics Rajeev Chandrasekhar told TOI that executives from Tesla’s headquarters had a meeting with certain wings of the government where they were encouraged to consider investments here.

“Yes, they did have meetings with the government. We have conveyed that we are keen to see them invest in India and will work with them as they build their plants here,” Chandrasekhar said. “We told them that India is now a trusted destination for all players in electronics and electric vehicles supply chains.”

Tesla had carried out a detailed market research about getting its cars in India around two years ago, but had decided to not pursue the case last year after failing to get any special incentives from the government.

The company had been pitching for concessions on import duty for introducing its cars in the country directly, but the government refused to play ball, giving the examples of others such as Mercedes-Benz, Tata Motors and Mahindra & Mahindra which are making greens locally.

The government was also cagey on Tesla due to reports that the company may import cars from its China factory, something which is being seen as a no-go area due to the heightened tensions.

Currently, India imposes 100% duty on import of completely-built cars with CIF (cost, insurance and freight) value more than $40,000 and 60% on those costing less than the amount. (The Times of India)