India Lures Tesla With Offer of Cheaper Manufacturing Costs Than China

In an effort to increase India’s production capacity, the country’s transport minister has made an effort to lure Tesla to set up a factory, by offering the US electric car maker the cheapest manufacturing costs in the world.

According to an interview with Reuters, transport minister Nitin Gadkari revealed that India’s government has reached out to Tesla, offering an incentive package that would ensure manufacturing costs are the lowest in the world— even lower than the current costs at Tesla’s Shanghai factory. Tesla CEO Elon Musk previously entertained the idea of selling cars in India, and in January confirmed that he was currently in the midst of opening several Tesla showrooms.

However, Gadkari noted that he would prefer Tesla to create an entire assembly line of electric vehicles, in which event Indian authorities would grant higher concessions. “Rather than assembling (the cars) in India they should make the entire product in the country by hiring local vendors. Then we can give higher concessions,” Gadkari told Reuters. “The government will make sure the production cost for Tesla will be the lowest when compared with the world, even China, when they start manufacturing their cars in India. We will assure that,” he continued.

The offer was made several weeks after the government of India’s south eastern state of Karnataka revealed that Tesla has taken an even further step in establishing a market in the country, with plans to construct an electric-car manufacturing unit in the region. The US EV company had reportedly incorporated Tesla Motors India and Energy Private Limited with the state’s registered office in Bengaluru.

India, which last year introduced tightened emission regulations for automakers, still has a long way to go before it can meet its Paris Accord climate commitments. India’s emerging EV market accounted for only 5,000 out of a total 2.4 million vehicles sold in the country in 2020. The country’s decaying electricity infrastructure, as well as the relatively high cost of electric vehicles were a large deterrent to buyers.

In comparison, out of 20 million cars sold in China last year, 1.25 million of them were zero-emission vehicles. Moreover, China accounted for over one-third of Tesla’s global sales. However, given the current deteriorating relationship between Musk and China following a number of quality control complaints, India’s offer may sound more and more enticing with each passing Tesla scandal.

Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One thought on “India Lures Tesla With Offer of Cheaper Manufacturing Costs Than China

  • March 5, 2021 1:02 PM at 1:02 pm

    Cost of charging an EV is higher than petrol and diesel compare montly bills for gas and electricity for households. Its a game for the rich not general public .


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