Tesla CEO Elon Musk is set to announce a significant investment in India amounting to $2-$3 billion, primarily aimed at establishing a new factory, according to sources familiar with the discussions.
Musk's visit to New Delhi next week, where he is scheduled to meet with Prime Minister Narendra Modi, is expected to mark a pivotal moment as the electric car giant ventures into the world's third-largest automotive market, where electric vehicle adoption is still in its infancy.
Scheduled for Monday, Musk's meeting with Modi is anticipated to announce Tesla's ambitious plans for India, strategically positioning the company amidst a landscape dominated by local carmaker Tata Motors.
Despite the nascent state of India’s EV market, which accounted for just 2% of total car sales in 2023, the government has set ambitious targets aiming for 30% of new cars to be electric by 2030.
Musk's visit to India comes against the backdrop of challenges in Tesla's major markets, including the United States and China, where sales have shown signs of slowing down, leading to recent layoffs affecting 10% of its workforce.
While specific details of Musk’s India visit remain closely guarded, with the CEO confirming only through his social media platform X that he will meet Modi, sources suggest that Musk is likely to disclose an investment figure without divulging specifics such as the timeline or the Indian state where the plant will be established.
For years, Musk had been critical of India's high import taxes for electric vehicles, advocating for policy changes.
In March, India’s government introduced a new EV policy, significantly lowering import taxes to 15% from as high as 100% on certain models, contingent upon carmakers investing at least $500 million and setting up local manufacturing facilities.
Tesla has already initiated the process of scouting for showroom spaces in New Delhi and Mumbai, with its Berlin factory gearing up to produce right-hand drive cars intended for export to India later this year.
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