Tesla aims to make about half a million EVs annually in India, report says

BENGALURU — Tesla Inc. is discussing an investment proposal with the Indian government to set up a factory with annual capacity of about half a million electric vehicles, the Times of India reported on Thursday, citing government sources.

The U.S. EV maker is also looking at using India as an export base to ship vehicles to countries in the Indo-Pacific region, the report said.

The starting price for the vehicles will be 2 million rupees ($24,400), the report added, which is more than double that of India's cheapest EV, the MG Comet, and half a million costlier than the Tata Nexon EV, the top-selling electric car in the country.

Last year, Tesla's India entry plans were stalled after the country's government refused to lower import taxes on the company's vehicles. The country levies as much as a 100 percent import tax on EVs.

India is eager for Tesla to manufacture vehicles locally, but the company wants to initially export EVs to the country to test market demand.

In renewed efforts to enter the market, Tesla held discussions in May with officials about incentives being offered by the government for its cars and battery manufacturing, Reuters reported.

India's commerce and industry ministry is leading the talks this time and hopes to put together a "good deal", while maintaining a level-playing field as talks now involve both local manufacturing and exports, the local media report added.

In a meeting with Tesla CEO Elon Musk last month, Indian Prime Minister Narendra Modi pushed the automaker to make a "significant investment" in the country.

The commerce and industry ministry, Tesla and Musk did not immediately respond to Reuters' requests for comments.