In what is set to be a landmark moment for the electric vehicle (EV) industry in India, Tesla CEO Elon Musk is expected to announce a major investment of $2-$3 billion during his upcoming visit to New Delhi. Sources with knowledge of the matter revealed that the investment will primarily focus on the establishment of a new manufacturing facility. Mr. Musk’s trip includes a much-anticipated meeting with Prime Minister Narendra Modi on Monday as he plans to discuss Tesla’s entry into one of the fastest-growing automotive markets in the world.
Even though India’s EV market is nascent and largely dominated by local manufacturer Tata Motors, Musk’s planned announcement aligns with the nation’s broader sustainability goals. With electric vehicles accounting for a mere 2% of total car sales in 2023, the Indian government has set an ambitious target to boost this share to 30% by the year 2030.
Musk’s arrival in India comes at a challenging time for Tesla, with the company grappling with decelerating sales in its major markets, the United States and China. This slowdown has led to Tesla announcing this week a significant reduction of its workforce by 10%. The details of Mr. Musk’s schedule in India are currently opaque, with only a confirmation of his meeting with PM Modi being openly shared on his social media platform X.
Despite the absence of specifics, it is believed that Musk will disclose the investment figure without delving into the particulars such as the timeline for the establishment of the factory, or the exact location within India where the facility will be built.
The anticipation around Tesla’s investment has been brewing for some time, particularly after years of Elon Musk voicing concerns over India’s high import duties on EVs. However, recent developments may have paved the way for a more conducive environment for Tesla’s investment. In March, the Indian government rolled out an updated EV policy where it slashed import taxes to 15% from as high as 100% on certain models, on the condition that the automaker commits to a $500 million investment and establishes a manufacturing plant in the country.
Adding to the preparation for Tesla’s entry into the Indian market, the company has initiated the hunt for showroom locations in key metro cities of New Delhi and Mumbai. Furthermore, Reuters reported that Tesla’s Berlin facility has begun producing right-hand drive versions of their vehicles, which are intended to be shipped to the Indian market later in the year.
The Tesla chief is also expected to participate in a government-hosted event in New Delhi, which will focus on space startups. Given Musk’s ownership of the U.S. space enterprise SpaceX, his participation is set to draw significant interest from the Indian space startup community.
Yet, the anticipation does not diminish the looming absence of an immediate response from Tesla in regard to the speculations and information shared by the sources. As one of the world’s richest entrepreneurs with a reputation for disrupting traditional industries makes his way to India, the entirety of the auto market, from industry leaders to potential EV customers, are keeping a close watch on what Mr. Musk’s visit might spell for the future of electric mobility in the region. The confluence of Tesla’s innovation and India’s manufacturing potential could ignite a transformative partnership, positioning India as a pivotal player in the global EV landscape.
