Tesla production in India: EV carmaker to set up vendor base in India says report

Elon Musk-led Tesla, which has been trying hard to enter the indian market has reportedly agreed to the Centre’s proposal to set up a vendor base in India along with starting units to assemble electric vehicles in the country. The Centre had reportedly suggested that the company first begin domestic assembly and then set up a vendor base in the country.

According to a Financial Express report, Tesla might not delay the setting up of vendor base as it does not want to decouple its manufacturing and supply chain.

The report further adds that Tesla is expected to submit its plans for manufacturing in India within 6 months.

Currently, over 50 per cent production of Tesla happens in China and it has a large vendor base there. To relocate these vendors to India, the company needs to ensure joint ventures in India as the country does not allow 100 per cent Chinese investments.

The representatives of the firm visited the country last month and held meeting with various parts of the government, including the commerce and industry ministry.

"We have made it very clear that imports are not the preferred thing from our side...The company is talking big in terms of complete supply chains," one of the official sources said.

When asked about extending incentives to the firms, they added that "the government is not looking at any tailored incentives as of now. States are a different matter. States might compete with each other and someone might give them (concessions)".

In 2021, the US-based electric car maker demanded a reduction in import duties on electric vehicles (EVs) in India.

At present, cars imported as completely built units (CBUs) attract customs duty ranging from 60 per cent to 100 per cent, depending on engine size and cost, insurance and freight (CIF) value less or above USD 40,000.