Tesla to invest up to $2 billion for Indian factory

Tesla is ready to invest up to $2 billion to set up a factory in India if the government cuts import duty on its vehicles to 15 percent for the first two years of operations, the Economic Times reported on Friday.

Reuters reported in August that India is working on a new EV policy to slash import taxes to as low as 15 percent – compared to the current 100 percent on cars priced above $40,000 and 70 percent for the rest – in exchange for a commitment to some local manufacturing, reports Reuters.

The Elon Musk-led electric vehicle (EV) maker is willing to invest up to $500 million if the government approves the reduced duty for 12,000 vehicles and up to $2 billion if the concession is for 30,000 vehicles, the ET report said, citing unnamed sources.

The government is examining the viability of Tesla’s proposal to invest $2 billion but wants to reduce the number of cars imported on a lower duty, compared to Tesla’s proposal, the Economic Times said.

Tesla, the department for promotion of industry and internal trade, ministry of heavy industries, ministry of road transport & highways and the ministry of finance did not immediately respond to Reuters’ requests for comment.