Tesla to double imports from India, reveals Piyush Goyal during visit to Elon Musk’s EV Factory

India’s Commerce and Industry Minister, Piyush Goyal, recently visited the manufacturing facility of Tesla, the leading US-based electric vehicle (EV) manufacturer, in Fremont, California.

Although he missed meeting Tesla CEO Musk, during the visit, Goyal announced that Tesla plans to double its imports of auto components from India. The minister expressed his delight in seeing talented Indian professionals, including engineers and finance experts, in senior positions contributing to Tesla’s innovative efforts in transforming mobility. Musk meanwhile, apologised for not being able to meet the minister.

It was an honor to have you visit Tesla!

My apologies for not being able to travel to California today, but I look forward to meeting at a future date.

— Elon Musk (@elonmusk) November 14, 2023

Goyal also highlighted the increasing significance of Indian auto component suppliers in Tesla’s EV supply chain, mentioning the company’s intention to double its components imports from India. He noted the absence of Tesla’s CEO, Elon Musk, during the visit and wished him a speedy recovery.

This visit gains significance amid reports suggesting that India is considering customs duty concessions for Tesla as it explores the possibility of establishing a manufacturing plant in the country. In September, Goyal mentioned that Tesla aims to source components worth around USD 1.9 billion from India in the current year, compared to USD 1 billion in 2022.

Anticipation is growing in India, as the government is reportedly expediting approvals for Tesla’s entry into the Indian market. The government has rolled out production-linked incentive (PLI) schemes for advanced chemistry cell (ACC) battery storage and the auto, auto-components, and drone industries, with substantial financial allocations.

Regarding incentives for Tesla, Goyal emphasized that the government is not planning a separate policy but rather encourages the company to avail support measures under existing schemes like PLI for auto and advanced chemistry cells.

As per recent report, the PMO has also asked all concerned ministries to fast-track the clearance of all required licenses and documents for Tesla, and deal with them on a priority basis.

Additionally, discussions are ongoing about potential reductions in import duties for completely built-up electric vehicles (EVs) to facilitate Tesla’s entry into the Indian market.

While import duties for CBUs below $40,000 currently face a 70 per cent import duty, and those above $40,000 face a 100 per cent import duty, the government is reportedly contemplating a significant reduction, possibly bringing it down to 15 per cent for electric vehicles across all price ranges. However, official confirmation of this potential policy change is yet to be announced.