Tesla Discusses Major Investment Proposal with India
Reports from the Times of India indicate that Tesla (NASDAQ: TSLA) is currently engaged in discussions with the Indian government regarding a significant investment proposal. The core of the proposition is the establishment of a manufacturing plant in India with the annual capacity to produce approximately half a million electric vehicles.
Proposed Tesla EV Pricing Exceeds India’s Current Market
The report further reveals that the base price for these vehicles will start from INR2 million ($24,400.66). This price tag is over double that of the most affordable EV in India, the MG Comet, and significantly higher than the best-selling Tata Nexon EV, priced half a million rupees less.
Import Tax Impasse Stalls Tesla's Initial Entry into India
Tesla has been enthusiastic about penetrating the Indian market, yet their progress has been hampered by the government's reluctance to lower import taxes on electric vehicles. India imposes an import tax of up to 100% on electric vehicles, presenting a considerable challenge for the automaker.
Renewed Negotiations with Indian Officials
Elon Musk, CEO of Tesla, reopened negotiations with Indian authorities, including Prime Minister Narendra Modi, in May to discuss potential incentives that could lure the company to erect a manufacturing facility in the nation. During this meeting, Prime Minister Modi urged the automaker to make a "significant investment" in India.
Optimistic Outlook on the New Round of Negotiations
In the latest development, negotiations are being spearheaded by the Indian Commerce and industry ministry, striving to arrange a "good deal." The ministry is hopeful of maintaining a balanced playing field as the discussions now encompass local manufacturing and exports, according to local media reports.
Tesla's Stock Gains Amid Ongoing Negotiations
Amid the ongoing discussions, Tesla's stock (TSLA) saw a rise of 0.78% in premarket trading on Thursday, indicating a positive market response to the prospective factory establishment in India.