Tesla officials are due to meet with India’s commerce minister this month to discuss plans to establish a plant to produce what the firm has branded as an all-new $24,000 car, according to a source with first-hand knowledge of the issue who spoke to Reuters.
According to the source, Tesla has expressed interest in developing a plant in India that would manufacture affordable electric vehicles (EVs) for both the domestic market and export. The company has also stated that the plant would produce the new vehicle.
The negotiations mark a remarkable turnaround for the corporation after calls from government officials to commit to locally producing cars last year derailed efforts to lower import duties on EVs delivered to India.
Since Elon Musk met India’s Prime Minister Narendra Modi in June and declared his intention to make a sizable investment in the nation, the meeting with the commerce minister would be the highest level of conversation between Tesla and the Indian government.
A 2 million rupees ($24,000) car would be twenty-five percent cheaper than the present entry-level Model 3 sedan, priced at just over $32,200 in China, is said to have been brought up in discussions over a potential Indian facility.
The target price of the new Tesla vehicle, according to the Times of India newspaper, is $24,000.
Tesla did not immediately respond to a request for comment.
In India, the third-largest auto market in the world, electric vehicle sales now make up less than 2% of all vehicle sales.
Tesla executives visited India in May, according to Reuters, and spoke with government representatives about setting up a base for manufacturing cars and batteries there.
The resumption of discussions with Indian government representatives in New Delhi is planned for this month, according to two persons with knowledge of the talks who declined to be identified because the conversations are ongoing in confidence.
The first person stated that as part of that, Tesla representatives are scheduled to meet with Indian Commerce Minister Piyush Goyal, and conversations are anticipated to revolve around creating an EV supply chain and talking about land allocation for a factory.
An inquiry for comments was not answered by the Ministry of Commerce.
Since the beginning of the year, Tesla has aggressively discounted its current models, and Musk has consistently stated that lowering the price of EVs significantly will be essential to the company’s long-term viability.
Tesla has stated that its next-generation car platform will reduce production costs by 50% and that various models, including an autonomous “robotaxi,” might be created from it without providing any further information regarding these upcoming vehicles’ specifications or prices.
According to the firm, this low-cost, large quantities platform will be utilized at further factories as well as the Tesla factory currently under construction in Mexico to produce autos.
Tesla presently manufactures EVs in Texas and California. It has facilities in Shanghai and Berlin outside of North America.
With about 40% of the automaker’s total global capacity located in its main factory, Shanghai, Tesla is the largest. There are plans to increase capacity there, but they need regulatory approval first.
Nikunj Ohri and Shivangi Acharya contributed additional reporting, and Kevin Krolicki and Kirsten Donovan edited the piece.