India has once again called upon billionaire Elon Musk to manufacture Tesla Inc. cars locally instead of selling China-made electric vehicles in the world's fourth-largest autos market as demand for clean transport surges.
"If Elon Musk is ready to manufacture Tesla in India, then there is no problem,” Road Transport Minister Nitin Gadkari said at an event Tuesday. But manufacturing cars in China and selling them in India is not a "good proposition."
Discussions between Tesla and the Indian government have come to a standstill over import taxes and a local factory. The U.S. automaker is seeking lower levies in India so it can test the market by selling cheaper imported EVs before committing to a manufacturing base of its own.
India will consider Tesla's demand for a reduction in taxes only if it promises to buy $500 million of auto parts from local suppliers and ramp up domestic sourcing by around 10 per cent to 15 per cent each year, people familiar with the matter said in February.
For Tesla, India may be an attractive EV bet as an increasing number of international automakers pile in. Kia Corp. is bringing its first electric car to India later this year, while Hyundai Motor Co. has vowed to roll out six battery models by 2028 and launch its first electric crossover SUV, the Ioniq 5, this year. Toyota Motor Corp. has agreed to consider adapting its hydrogen-powered fuel-cell car, the Mirai, for local road and weather conditions.
Demand for EVs is soaring, Gadkari said, adding major global brands like Mercedes-Benz, BMW AG, Toyota and Hyundai are doing an "excellent” job with their clean SUVs.
Selling made-in-India cars would be a win-win with the nation's large automobile market having the potential to generate high profits for Tesla, he said, adding that all the necessary vendors and manufacturers of high-quality auto spare parts are available in the country.