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Tesla Eyes Gujarat for First India Manufacturing Plant

Tesla's Indian Venture Sparks Excitement at Vibrant Gujarat Summit

28 December 2023

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Kunal Tyagi

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  • Tesla is poised to establish its first Indian manufacturing plant in Gujarat, with an official announcement expected during the Vibrant Gujarat Summit in January 2024.

  • Gujarat's strategic advantages, including a favorable business environment and location, make it the preferred destination for Tesla's manufacturing efforts, with proposed sites in Sanand, Dholera, and Becharaji.

  • While speculation about Tesla's entry into the Indian market has been ongoing, recent reports suggest the company may receive concessions, such as a 15-20% import duty on fully-built cars, contingent on establishing a manufacturing presence in India.

Tesla, the electric vehicle (EV) manufacturing giant, is on the verge of making a significant stride in the Indian market by establishing its first local manufacturing plant in Gujarat. The much-anticipated announcement is expected to take place during the Vibrant Gujarat Summit in January 2024, with Tesla CEO Elon Musk likely to be in attendance. Gujarat's strategic advantages, including a favorable business environment and a strategic location, have positioned it as the preferred destination for Tesla's manufacturing endeavors.


The state government has proposed multiple locations, such as Sanand, Dholera, and Becharaji, as potential sites for the Tesla plant, aligning with the company's goal of meeting both domestic and international demands.


Speculation regarding Tesla's entry into the Indian market has been circulating for some time, with ongoing discussions between the company and the Indian government on concessions and regulatory considerations. While the official government stance is against providing subsidies on EV imports, recent reports suggest that Tesla may be granted the ability to import fully-built cars at a concessional import duty of 15-20%, a significant reduction from the current 100% duty on such imports. However, this concession is contingent on Tesla establishing a manufacturing presence in India, emphasizing the importance of meeting this condition for duty benefits.


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The potential entry of Tesla has generated excitement, but it has also raised questions from Indian EV manufacturers, including Tata Motors and M&M. These companies highlight their ongoing contributions to the Indian automotive landscape and the manufacturing of electric vehicles within the country, questioning the need for special treatment for the American automaker.


Gujarat, already home to manufacturing facilities for major automakers like Maruti Suzuki, Tata Motors, and MG, is solidifying its position as a key hub for the automotive industry. Tesla's potential manufacturing plant in the state adds to its automotive prowess, with negotiations in their final stages and an official announcement expected during the Vibrant Gujarat Summit.


As the Indian government and Tesla engage in discussions on car manufacturing in the country, the outcome of these negotiations will likely shape the landscape of the electric vehicle market in India.


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