Elon Musk’s Upcoming Visit to India : Key Points

April 18, 2024

Musk is expected to announce an investment of $2-$3 billion in the country, primarily for building a new factory. This move marks Tesla’s entry into the world’s third-largest auto market, where electric car adoption is still in its nascent stage.

About India’s EV Market

India’s electric vehicle (EV) market is currently small but growing, with local carmaker Tata Motors dominating the sector. In 2023, EVs accounted for just 2% of total car sales in the country. However, the Indian government has set a target of 30% of new cars to be EVs by 2030, aiming to accelerate the adoption of clean energy vehicles.

In March 2024, India unveiled a new EV policy lowering import taxes to 15% (from up to 100%) if carmakers invest $500 million and set up a factory.
The government offers incentives and policies like the FAME scheme to promote EV adoption.
Tata Motors currently dominates the Indian EV market.
Tesla is scouting for showroom locations and aims to export cars to India.

Tesla’s Challenges and India’s EV Policy

Musk’s visit comes at a time when Tesla is facing slowing sales in its major markets, the United States and China.
The company has also recently announced layoffs affecting 10% of its workforce.
For years, Musk had opposed India’s high import taxes for EVs and lobbied for a change in policy.
In March, the Indian government unveiled a new EV policy that lowers import taxes to 15% from as high as 100% on some models, provided the carmaker invests at least $500 million and sets up a factory in the country.

Additional Facts

India is the world’s fifth-largest car market, with sales of around 3.8 million vehicles in 2023.
The Indian government has been actively promoting the adoption of EVs through various incentives and policies, such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme.
In 2021, Tesla registered its Indian arm amid indications that the company was set to enter the country’s automotive market.
India has also been focusing on developing its space sector, with the government opening up the industry to private players in 2020.
SpaceX has been in talks with the Indian Space Research Organisation (ISRO) for potential collaborations in the past.

The move is expected to boost the country’s EV ecosystem and contribute to India’s efforts to accelerate the adoption of clean energy vehicles. With the Indian government’s supportive policies and the growing interest in EVs, Tesla’s entry could be a game-changer for the Indian automotive industry.

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