Tesla eyes $2 billion investment in India but with conditions: Report

Tesla in India: Tesla is eyeing an investment up to $2 billion to set up a factory in India. However, it wants a 15% concessional duty on imported vehicles in its first two years here, reported The Economic Times.

Investment Proposal

As per the report, the electric vehicle maker has provided the Centre with a proposal for the investment. Tesla has added that if it gets a concessional duty for 12,000 vehicles, it may invest $500 million in India. This may go up to $2 billion if the concession extends to 30,000 vehicles.

Also Read: India closer to signing deal with Tesla to set up factory

Meanwhile, the government is likely to push for a concessional tariff on Tesla's 10% of the projected units that would be sold in India for the first year and 20% in the second year. Currently the import duty on cars with insurance and freight value of over $40,000 is 100%. For vehicles cheaper than that, the import duty is 70%.

Made-in-India cars

The Economic Times also reported that Tesla is likely to commit 20% localisation in its Made-in-India cars in the first two years which may increase to 40% in four years. The three models that Tesla would introduce in India include Model 3, Model Y and a new hatchback. Model 3 and Model Y are likely to be priced at Rs 38 lakh and Rs 43 lakh if the concession is granted. The hatchback is expected to be priced at Rs 20.75 lakh.

Bloomberg on November 21 reported that Tesla is closer to signing a deal with India, that would allow the US automaker to ship its electric cars to the country from next year and set up a factory within two years