Tesla is said to be rekindling its interest in entering India, with the EV maker reportedly said to be searching for showroom space in New Delhi. This was indicated by Reuters, which said two sources revealed that the company is in early-stage talks with DLF, the country’s biggest property developer, to help secure a location in the capital region.
This comes after the company paused its investment plans earlier this year. Tesla is reportedly evaluating a number of locations, including DLF’s Avenue Mall in southern Delhi and the Cyber Hub office and retail complex in nearby Gurugram city, for its consumer experience centre as well as a space three times larger for its delivery and service centre.
However, the search is still “exploratory” and nothing has been finalised, according to one of the sources. A third source added it is not certain that Tesla’s discussions with DLF will lead to a deal
Musk had planned to meet Indian prime minister Narendra Modi in April to potentially announce an investment of USD2-3 billion in India. However, he called off his visit just before the meeting after Tesla decided to lay off 10% of its staff due to falling sales.
The news of a potential market entry into India will be welcome news for the country. Having lobbied for Tesla to set up shop and build an assembly plant in India for years, the Indian government earlier this year announced a new electric vehicle (EV) policy that would support the entry of the American EV maker as well as other interested companies.
Under the new policy, import taxes will be lowered on certain EVs produced by carmakers that commit to invest at least USD500 million (about RM2.2 billion). Additionally, they will also be granted a three-year period to establish local manufacturing facilities for EVs and must ensure that at least 25% of the components are procured within India by the third year – this goes up to 50% by the fifth year.
Companies that meet these requirements will be allowed to import up to 8,000 EVs with a minimum cost, insurance, and freight (CIF) value of USD35,000 (about RM155k) or more a year at a lower tax rate of 15%, which is significantly lower than the present import duties of up to 100%.
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