Tesla Inc TSLA is looking to export its cars to India next year and establish a manufacturing facility within two years.
The deal will likely be announced at the Vibrant Gujarat Global Summit in January.
Gujarat, Maharashtra, and Tamil Nadu are potential locations for Tesla's factory, chosen for their established electric vehicle and export ecosystems, Bloomberg reports.
Tesla's initial investment in the plant is estimated to be around $2 billion, with plans to increase auto parts purchases from India to potentially $15 billion. Additionally, Tesla aims to produce some batteries locally to reduce costs.
Tesla's entry into India, the world's third-largest automobile market, could significantly impact the country's EV sector, which currently represents a small fraction of total vehicle sales, hindered by high costs and limited charging infrastructure.
Tesla has not directly imported cars to India due to high tariffs but aims to price its locally-made cars competitively, possibly as low as $20,000. The company has been increasing its auto parts purchases from India, with Trade Minister Piyush Goyal noting nearly doubling these purchases. The dialogue between Tesla and India, which had stalled due to disagreements over import taxes and EV policies, has recently reopened. India is considering tax reductions for foreign EV makers who commit to local production.
Previous reports indicated Tesla's plans to produce and sell battery storage systems in India. The EV maker has submitted a proposal seeking incentives to establish a factory in the country.
Tesla CEO Elon Musk intends to visit India in 2024.
Price Action: TSLA shares traded higher by 0.51% at $236.80 premarket on the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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