Tesla Inc. is eyeing a local partnership with Reliance Industries Limited (RIL) to establish its operations in the country. The US electric car giant is contemplating a joint venture with Reliance to construct a manufacturing facility, according to report by The Hindu Businessline. With a designated budget of $2 billion for its endeavours in India, Tesla has been actively surveying potential locations for its manufacturing plant. Gujarat and Maharashtra have emerged as frontrunners, with Maharashtra reportedly gaining preference, as per the report.
Elon Musk, CEO of Tesla, confirmed the company's entry into India during an X (formerly Twitter) Spaces session with Nicolai Tangen, CEO of Norges Bank Investment Management. Musk said the importance of India in the global electric vehicle market, saying, "India should have electric cars just like every other country has electric cars."
Senior officials from Tesla are expected to visit India within the next month to finalise the plant's location and solidify the joint venture with Reliance. However, negotiations with Reliance are not exclusive, leaving room for Tesla to explore other domestic partnerships if needed, the report highlighted.
The move comes on the heels of the central government's approval of an Electric Vehicle (EV) policy in March, aimed at positioning the country as a leading global hub for EV manufacturing. The policy mandates a minimum investment of Rs 4,150 crore (about $500 million) with no maximum investment cap, aiming to attract investments from renowned global EV manufacturers.
Additionally, the policy sets a three-year timeline for establishing manufacturing facilities, commencing commercial production of EVs, and achieving 50 per cent domestic value addition (DVA) within five years at maximum.
The policy caps the duty on imported EVs at the investment made or Rs 6,484 crore (equivalent to incentives under the PLI scheme), whichever is lower. It also outlines import limits, allowing a maximum of 40,000 EVs annually, with an annual cap of 8,000 vehicles if the investment exceeds $800 million. Unused import limits can be carried over, the policy specifies.
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