Tesla India’s manufacturing plans after playing chess with officials
As of this year, Tesla has been trying to test the waters of the Indian market. While India initially insisted on having a manufacturing plant, Elon Musk was unsure if Tesla was in the country. On the other hand, Tesla already had Giga Shanghai and the future Giga Berlin to easily supply cars to the country. But by manufacturing in India with available resources and low labor costs, Tesla could potentially benefit. However, it wasn’t until government officials began to consider reducing the import tax that Elon Musk began to consider the option of a manufacturing plant. According to Soumen Mandal, a Counterpoint Research analyst said Tesla plans to finalize manufacturing plans by 2022.
According to Mandal, India is one of the biggest beneficiaries of the EV movement in the world. As Tesla set up a manufacturing plant here, the company would tap into the first move and decide the company’s success in the country. According to the Economic Times of India report, Mandal said, “None of the major automakers want to miss out on the opportunity to gain a share of the Indian market. Tesla is no exception in this case. The cheap availability of resources and the low cost of labor will allow Tesla and other automakers to make a higher profit if they set up a local manufacturing or assembly plant. “
Chess game with officials
For months, the company was spared by the country’s government officials. Although they initially entered the idea of setting up a manufacturing plant, Elon Musk took a step back. However, Musk was testing demand in the country by trying to negotiate to lower the import tax.
Government officials were initially firm not to lower the import tax. However, it would be too rare an opportunity for the country to lose the main EV player to enter the Indian market. Tesla was able to survive despite the semiconductor shortage. It is already known that Tesla is considering Russia for its next manufacturing plant.
Thus, Tesla’s import tax surge is now being reconsidered by the authorities. Where an Indian official said: “We have not yet confirmed the reduction in tariffs, but discussions are ongoing. However, Mandal has a firm belief that Tesla and India will get away with this because it is too good an opportunity to pass up. As Mandal stated as “Hence the desire to earn more profit as well as the desire to gain market share in one of the future biggest automotive markets is bringing Tesla to India. “