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Tesla has not yet penetrated the Indian market, but a new report in the local media suggests that Tesla is showing interest in a battery factory project in the country.
In 2016, CEO Elon Musk said Tesla was planning to enter the Indian market, but that plans have been delayed.
Jay Vijayan, then director of IT services for Tesla and born in India, went to the country to study the possibility that Tesla is starting to import cars to India.
After that, there was some confusion about Tesla's ability to even import its vehicles to India in 2016.
At the time, Musk was worried about local regulations that would require foreign retailers to stock up to 30% in their rooms, which could prevent a launch.
The Ministry of Trade and Industry responded to Musk saying that he was mistaken, but they actually assumed that Tesla would open a factory in India to sell cars in the country, but as Nearly all markets outside the United States, Tesla was considering importing vehicles first.
Earlier this month, Musk again stated that Tesla's entry into the market was problematic:
I am told that import duties are extremely high (up to 100%), even for electric cars. This would make our cars unaffordable.
– Elon Musk (@elonmusk) August 1, 2019
Foreign builders must have a local factory in India to reduce the extremely high import duties applied to foreign cars.
Musk did not seem willing to build a Tesla factory in India before he could import cars, but he said there was hope:
For other countries, we pay in part for the local factory by selling cars in advance. In addition, gives a sense of demand. The current rules in India prevent this, but recent changes to the sales tax offer hope for future changes.
– Elon Musk (@elonmusk) August 1, 2019
A few weeks later, we now learn that Tesla, along with other electric car manufacturers and battery manufacturers, have expressed interest in participating in a government project to finance several battery factories in the country.
Daily Indian Financial mint reported:
"Tesla and the contemporary Chinese company Amperex Technology Co. Ltd. (CATL) are among the companies that have shown an initial interest in the Indian government's plan to build large factories for the manufacture of lithium-ion batteries at an investment of 39; about ₹50,000 crore.
₹An amount of 50,000 crores equals about US $ 7 billion and the government's goal is to build six large factories capable of producing several gigawatt hours of Li-ion batteries a year, like Tesla Gigafactory 1 in Nevada.
According to the report, BYD is also among the companies interested in the project, but none of them commented on it.
Electrek's Take
I would take this report with a grain of salt until we have more details.
However, Tesla did not hesitate to say that he would need many battery factories in the long run. Still, there have not been many announcements since the launch of Gigafactory 1. That was six years ago.
Tesla then announced that several other factories would follow and Elon had even said that all future Tesla factories would include both the production of cars and batteries.
This has not materialized so far. Even Tesla's Gigafactory 3 in China is not planning to manufacture its batteries yet and will be using other manufacturers.
That said, we have heard rumors about other projects, including a battery factory in Indonesia.
Recently, Tesla has virtually confirmed its intention to manufacture its own battery cells and we expect them to announce the creation of a new plant to support these projects.
Will this factory be in India? I doubt it, but I would not be surprised if Tesla eventually deploys a production capacity on the market.
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