IANS | 04 Apr, 2024
It was in 2015 when Prime Minister Narendra Modi visited the Tesla
facility in Palo Alto, California and Elon Musk took him for a tour of
his electric car plant, convincing the PM that electric vehicles are
going to be the next big disruptor. Nearly a decade later, the Tesla is
set to come to - and be made in - India.
The tech billionaire is
finally sending a team of experts to scout for a possible location to
set up a $2-$3 billion EV plant in the country.
Reports say that
on top of the Tesla CEO’s mind are three states -- Gujarat, Maharashtra,
and Tamil Nadu -- which have an EV infrastructure in place, as well as
ports which make it easier for the electric car giant "to export cars".
The
credit goes to PM Modi’s persistent efforts in convincing Musk to look
at India as his next big destination to establish a Tesla Gigafactory
and export EVs to the rest of the world. In June last year, PM Modi met
Musk in the US and appreciated his efforts at making technology
accessible and affordable in various sectors.
The Prime Minister
invited Musk to explore opportunities in India for investments in the
electric mobility sector. After meeting the Prime Minister, Musk started
exploring setting up his own supply chain ecosystem in India, thus
producing cheaper electric cars that might even start from Rs 20 lakh.
In
Musk’s own words, "He (PM Modi) really cares about India because he's
pushing us to make significant investments in India, which is something
that we intend to do and we're just trying to figure out the right
timing".
PM Modi "really wants to do the right thing for India. He
wants to make sure that the advantage from investments accrues to
India's advantage, which is, you know, obviously, that's the job", the
billionaire told reporters after meeting the PM.
India has more "promise than any large country in the world", he added.
Last
November, Union Minister Piyush Goyal also visited Tesla’s
state-of-the-art manufacturing facility in California. He posted on X
that it was "extremely delighted to see talented Indian engineers and
finance professionals working at senior positions and contributing to
Tesla’s remarkable journey to transform mobility".
"Also proud to
see the growing importance of Auto component suppliers from India in the
Tesla EV supply chain. It is on its way to double its component imports
from India," the Union Minister added.
The Tesla owner, however, apologised to Goyal for not being able to meet him as he was unwell.
In
the new EV policy announced last month, the PM Modi-led government has
reduced the customs duty to 15 per cent, albeit with certain riders. A
minimum investment of Rs 4,150 crore (about $500 million) will be needed
to set up EV manufacturing facilities, production will start within
three years and reach 25 per cent DVA (domestic value addition) by three
years and 50 per cent DVA within 5 years at the maximum, according to
the new EV policy.
This now paves the way for Musk to enter the Indian market.
India's
EV market has the potential to achieve over 40 per cent penetration
with $100 billion revenue by 2030. This growth is expected to be driven
by strong adoption (over 45 per cent) in both two-wheeler (2W) and
three-wheeler (3W) categories, with four-wheeler (cars) penetration
projected to grow to more than 20 per cent, according to a recent report
by Bain & Company and Blume Ventures.
India is also making
progress in building its EV charging infrastructure to phase out diesel
vehicles in a stipulated time frame. Additionally, government
initiatives like the Faster Adoption and Manufacturing of (Hybrid &)
Electric Vehicles (FAME) scheme have further incentivised EV adoption.
