Tesla

Tesla Model 3Ahead of the full fledge manufacturing plans in India, Tesla has commenced production of cars for Indian market to be shipped in from GermanyIn a bid to make a name for itself in the world’s third largest automotive market, Tesla has commenced production of RHD vehicles. Unlike initial speculations suggesting shipments from China, a recent report suggests Tesla intends to ship RHD vehicles to India from its manufacturing facility in Germany.Production Of Tesla Cars For India CommencedWorld’s leading electric car maker, Tesla, is poised to enter the Indian automotive scene and establish a manufacturing presence here. Initially, there were setbacks to Tesla from Indian Government regarding the reduction in taxation for establishing a retail chain with units shipped into the country from China.After a brief pause, Tesla changed its approach towards Indian market. The growing economy and India climbing the ladder to become the world’s third-largest automotive market certainly helped in these regards. One of the nudges could be Indian Prime Minister Narendra Modi’s visit to USA and dialogues exchanged with Tesla founder, Elon Musk.Because India is a market for RHD vehicles, initial speculations suggested an imminent import from Tesla’s Shanghai plant. RHD Tesla cars are primarily manufactured here and are exported to all RHD markets like UK, Japan, Australia and others.File photo from 2023. Elon Musk and Narendra ModiRecent report suggests Tesla has commenced production of RHD vehicles for India in its Berlin plant in Germany. Considering the proximity between Germany and UK, there is a possibility that Berlin-made RHD Tesla cars might be sold in UK, replacing Shanghai-made units. As of now, there are no confirmations regarding which vehicles Tesla has on the cards for Indian markets.Tesla’s Berlin plant currently manufactures Model Y. Considering Indian road conditions and market perception, high-riding Tesla vehicles like Model Y could be a good fit.Company’s roadmapElectric vehicle juggernaut, Tesla, has pledged to establish manufacturing facilities in India. The company is about to finalise the location for the manufacturing facility. A team from Tesla is expected to fly into India and decide between three prospective locations – Tamil Nadu, Maharashtra and Gujarat.Tesla Model 3 refreshedAhead of that, Tesla is bringing vehicles manufactured in Germany to India via CBU route. These developments surfaced following the revised taxes by Indian Government on certain electric vehicles who’s manufacturers invest a minimum sum of USD 500 million and commence production within the next three years.As per the revised Indian policy, manufacturers can import up to 8,000 units into the country under the revised taxation policy at a lower tax rate. In the grand scheme of things, Tesla intends to increase its reliance on Indian providers for sourcing various components, making India a bigger sourcing hub.Source More

Image for illustration onlyWhile the 100% import duty for cars encourages local manufacturing, newer policies may adopt a more flexible approach towards EV importsLast year, India had emerged as the world’s third largest auto market, after China and the US. The Indian automotive space has huge unlocked potential, especially in the EV segment. Tesla is looking at opportunities in India, but has strongly opposed the high import duty taxation regime.Possibility of reduced 15% import duty for EVsTalks between Tesla and the government have been going on for several months. While the company is willing to invest around USD 2 billion in India, it wants concessions on the import duty. The current tax structure of 100% import duty for cars valued over USD 40,000 (approx. Rs 33 lakh) is way too high, according to Tesla. For cars below USD 40,000, the import duty is 60%.File photo from 2023. Elon Musk and Narendra ModiTesla wants to use the CBU route, at least for the initial period. Tesla has been negotiating that import duty be reduced to 15%. While the government has also taken a tough stand, it appears that a more flexible import policy for EVs could be announced soon. As per ET Auto report, the new policy will allow reduced import duty on the condition that the OEM commits investments for setting up local manufacturing.To safeguard its interest, the government is likely to ask for bank guarantees from the OEM. The relaxation in import duty will be valid for a period of 2-3 years. If the OEM fails to provide investment for local manufacturing after the relaxation period, the government will have the option to encash the bank guarantees. The exact amount of bank guarantees is yet to be finalized. Bank guarantees will ensure that only OEMs that are serious about long-term presence in India get the benefits of reduced import duties.Other global brands can also benefitWhile Tesla may be credited for nudging policymakers to adopt a more flexible approach, other leading global automotive brands can also benefit. A recent example is Ford that seems to be planning a re-entry in India. Ford had recently trademarked Mustang Mach-E electric compact crossover SUV in India. Just like Tesla, Ford may also benefit from the new taxation policy being drafted for EV imports.Bad news for local OEMs?As the full details of the new EV import policy is not available, it is difficult to determine the impact on homegrown automakers. The new policy is likely to have adequate provisions to ensure that locally manufactured EVs continue to offer more value to consumers. The Indian auto industry will be looking at a level-playing field and not a system that provides an unfair advantage to carmakers like Tesla.Companies like Mahindra and Tata Motors have made massive investments to boost their EV business. The new EV policy should incentivize local manufacturing, which will bring investments, create jobs and increase technical know-how. More clarity will emerge when one gets to read the details of the upcoming EV import policy.Source More

Tesla India Factory could soon be realityAs compared to 100% import duty on cars costing more than $40,000, government is thinking about reducing tax to just 15%Make in India has benefitted various sectors such as electronics manufacturing, pharmaceuticals, renewable energy, defence manufacturing, space, food processing, etc. The automobile and automobile components manufacturers have also benefited from Make in India initiative. Going forward, the government may implement a more flexible approach for specific auto segments such as electric vehicles.Tesla EVs could get cheaperTesla has been eying the Indian EV space since several years. However, due to the high import duty, plans for India have been moving at a slow pace. While there is no official confirmation from the government, it appears that a middle ground is being worked out.One of Tesla’s primary conditions was to test the Indian market, before committing to setting up a manufacturing unit in the country. For this, Tesla wanted the import duties to be scrapped. But that was not accepted, as the government was committed to its Make it India initiative.New report reveals that the Indian government is now working on a more inclusive electric vehicle policy. It will enable carmakers like Tesla to test the waters before committing huge investments. Tesla has already rented space in India, which can be deemed as a positive development in the company’s plan to start India operations.As per the new electric vehicle policy being framed, import duty on high-end electric cars could be reduced to just 15%. This will allow carmakers like Tesla to import fully-built (CBU) EVs into India. The reduction in import duty will also benefit other luxury players such as BMW, Mercedes, Audi and Volvo. It will result in significant reduction in prices of imported luxury electric vehicles.Provisions to support Make in IndiaWhile import taxes for premium EVs could be lowered, it will be applicable with a set of conditions. This will ensure that the new electric vehicle policy continues to support the Make in India initiative. Taxes will be lowered only if the company commits to some level of local manufacturing in the initial stages. The overall quantum of local manufacturing will have to be increased gradually. Carmakers will also be required to start sourcing components locally. They will need to provide bank guarantees that will cover for any defaults in their commitments.The bank guarantees will also be used to create an ecosystem for local suppliers. In the first two years, local sourcing will have to be around 20%. By the fourth year, local sourcing will need to be increased to around 40%. The new electric vehicle policy is currently in draft stages. So, these numbers may change in the final version.While lowering taxes for high-end EVs may have its benefits, the government should be watchful of players that may use this as an opportunity to flood the market with imported cars. A provision for anti-dumping duty can be made in the new EV policy. This will help create a level-playing field for local manufacturers, who have invested a great deal of money in building their EV portfolio.Source More

Rendered image. Credit – Backstage With MillionairesTesla is currently testing Model 3 and Model Y in India, the former is expected to launch sometime next year
The entry of Tesla into the Indian market is a highly discussed topic in the automotive industry. There have been lots of ifs and buts regarding Tesla’s future in India even after the company officially registered its local entity in the country as Tesla India Motors And Energy Private Limited earlier this year.
In the latest development, the American EV brand has completed homologation and four of its electric car models in India. In addition, the Tesla Supercharger unit has now been spotted in India, image of which has been shared on Twitter by Tesla Club India.
Tesla in India
The approval document certified that Tesla’s electric cars are roadworthy in the country. Although names of models homologated have not been revealed yet, the Twitter handle thinks that the four car models registered are variants of Model 3 and Model Y. Both these cars have been spotted testing on Indian roads on multiple occasions in recent months.
However, we believe that Tesla might have homologated all four products in its global lineup, the other two being Model S and Model X. Confirmation on this is expected from Tesla in the coming time. The American EV manufacturer has brought its CCS2 Supercharger Units to India which are awaiting installation at the moment.
Tesla Supercharger In India
Challenges Ahead
From the image, they appear to be V2 150kW Superchargers. Again, no confirmation could be sought at the moment. All said, gaining a foothold in the Indian car market won’t be easy considering electric vehicles still account for only 1 percent of the country’s annual car sales.
Sparse charging infrastructure is the key reason for this slow market although governments at both central and state levels along with various auto OEMs have been pushing for charging stations across countries. India’s tax regime is another speed breaker that discourages premium car brands from launching their EVs in India.
Reduction in Taxes
Earlier this year, Tesla CEO, Elon Musk tweeted that import duties in India are among the highest in the world and the nation treats clean energy vehicles the same as IC engine-powered cars, which isn’t consistent with its climate goals. Tesla has openly come out and sought additional subsidies from the Central government in India for its upcoming electric cars in India which will most likely be offered as Completely Built Units (CBUs) initially.
However, this has resulted in mixed reactions across the country. Recently, Union Minister of Road Transport and Highways Nitin Gadkari, at the India Today Conclave 2021, claimed that upon its launch in India, the Tesla car will cost Rs 35 lakh. While this wasn’t a formal announcement, it seems that the Government of India has had some discussions with the American EV manufacturer regarding this issue. More

Rendered image. Credit – Backstage With MillionairesTesla would enter the Indian auto market with the likely launch of Model 3 electric sedan slated later this year
Tesla has already established its entity in India with its India headquarters based in Bengaluru, Karnataka. It has also decided to set up shops in three different cities of the country- Mumbai, New Delhi and Bengaluru. The electric car manufacturer is currently scouting for a place where it could establish the company’s first assembly line.
While it has been reported that Karnataka, Maharashtra and Gujarat are all keen to welcome the American brand with open arms, the Gujarat Government has meanwhile offered 1000 acres of land to Tesla to build its local production facility. The company is presently scrutinizing all available options.
Tesla Playing Out All Options
According to a senior Gujarat government official, Tesla is undecided whether to opt for Gujarat or dig deep in Karnataka. The official quoted, “There is little or no social life in Gujarat, while it is not so in Bengaluru. They are trying to negotiate with both Gujarat and Karnataka governments.” The American EV brand officially set its foot in India on January 8, 2021, when it registered itself as Tesla India Motors and Energy Private Limited in Bengaluru.
The recent further discloses that the Maharashtra Government has also offered a piece of land in the state for the purpose of building its local plant. However, talks didn’t materialize ever since.
Tesla Model 3 Spied Testing In India
It has come to light that Tesla officials wanted a big web of charging stations in the Mumbai Metropolitan Region as well as near the Jawaharlal Nehru Port Trust, the port where the cars will land following imports. Tesla has partnered with 27 vendors in India out of which 20 are said to belong from Maharashtra.
Since their last interaction in 2020, Tesla hasn’t responded to the Maharashtra Government. Earlier, Karnataka Chief Minister had proclaimed that the carmaker will set up its factory and R&D facility in his state shortly after it registered itself with the Registrar of Companies with a Bengaluru address. However, the Karnataka CM later deleted that tweet that contained this information.
Gujarat Likely Host
Meanwhile, Gujarat has offered land both inside and outside Adani Ports and Special Economic Zone (APSEZ) in Mundra. APSEZ has an area of 8,400 hectares out of which around half is lying vacant. SEZs are designated duty-free enclaves where the Indian customs law does not apply. What also holds in favour of Gujarat is its new EV policy introduced a few days ago that not only offers subsidies on purchase of EVs but also provides setting up of necessary charging infrastructure.
Additionally, land in Gujarat is far cheaper than that in Karnataka. Reports claim that the Gujarat government is looking to build an electric vehicle hub in Mundra and, therefore, has also proposed to allocate land for ancillary units that would assist Tesla. This would include land for an EV battery manufacturing unit as well as other component manufacturers.
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File Photo
Tesla India has been registered as Tesla India Motors and Energy Private Ltd – as per Ministry of Corporate Affairs

Earlier this year, Karnataka CM, B S Yediyurappa had tweeted that Tesla will commence operations with an R&D unit in Bengaluru. He had announced this on twitter. But soon after, he had deleted the tweet. A State Govt document, accessed by Reuters points to the fact that Karnataka will also be the home to Tesla’s car manufacturing plant.
This update comes on the back of statements from Gujarat and Maharashtra – both stating that they have invited Tesla to setup their Indian manufacturing unit in their respective state. Tesla is yet to confirm the report.
Tesla in India
Entry of the US based electric vehicle maker Tesla, into the Indian automobile sector, is particularly noteworthy as both the Central and State Governments are vying for higher adoption of green vehicle technology to conserve energy and preserve the environment.
Elon Musk’s Tesla Inc. has set up a subsidiary in Bengaluru with plans to introduce their range of electric cars in India later this year. The R&D Center is at Lavelle Road in Bengaluru and marks the company’s entry into the country with a paid up capital of Rs.1 lakh and authorized capital of Rs.15 lakhs.
Karnataka CM tweet which was deleted soon after it was posted
With plans to launch a range of electric vehicles in India in 2021, Tesla has named Vaibhav Taneja, Venkatrangam Sreeram and David Jon Feinstein as its three directors. Plans are afoot to launch the new Tesla Model 3 in India for a start, with local assembly and manufacturing to commence later.
First Tesla Car In India
It is rumoured that Tesla Model 3 will be the first to launch in India as it is the most affordable Tesla product. The all electric sedan will be brought in as a CBU initially. It will attract a 100 percent import duty unless the Government of India offers any concessions to Tesla so as to give electric vehicle entry a push. Standard range of 423 kms on a single charge.
South Of India Becoming EV Hub
South of India and more specifically Bengaluru is a hub of automotive engineering with centres of Daimler, Bosch, Continental, Fiat Chrysler. Electric vehicle segment is also seeing increased participation with mobility startups like Ola, Uber, Bounce and Vogo planning to introduce more electric vehicles into their fleets.
Ola is also keen on manufacturing electric vehicles with a new EV plant in Tamil Nadu. Ola will setup the world’s largest electric scooter manufacturing plant in Tamil Nadu – for the same they have signed an MoU of Rs 2,400 crores.
Ather Energy has also gone ahead with their plans. Production is now shifted to Hosur, Tamil Nadu from where the company aims to produce around 1 lakh units of electric two wheelers per annum.
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