The Elon Musk-led Tesla will be sending a team from the United States to study sites for a proposed $2 billion(Rs 16,700 crore) to $3 billion(Rs 25,000 crore) electric car plant in late April.
The officials at Tesla have stated that the focus on Indian states that have automotive hubs will be the scout locations. Maharashtra, Gujarat, and Tamil Nadu are them. The reason for these locations is the availability and accessibility to ports, making it easier to export cars and other required materials.
Reason for Tesla’s move
This move follows last month’s lowering of tariffs on higher-priced imported EVs (electric vehicles) for companies that commit to invest at least $500 million (Rs 4,150 crore), along with a three-year timeframe for starting commercial production.
The tariff cut was a concession Tesla had been pushing for as a precondition for investing. The US-based company expressed its interest last July in building a factory in India to produce an EV priced at $24,000. 
Further, The company has been trying to enter Indian markets for years, but New Delhi wanted a commitment to local manufacturing.
Additionally, the demand for EVs is slowing in its main markets, such as the US and China, causing the EV maker to report a drop in first-quarter deliveries and miss estimates.
However, India’s EV market is small but growing. EVs made up about 2% of the total car sales in India last year, and the government targets 30% by 2030. The Indian EV market is dominated by local EV makers Tata Motors and Mahindra.
Advantages for India
This move could regarded as one of India’s biggest inward foreign investments.
This would allow the Indian automotive industry to access global technologies, expand the product range, and improve cost competitiveness, facilitating enhanced EV adoption. Thus, benefiting auto parts makers based in India.
The establishment of EV plants in India will also create jobs and grow businesses.
Additionally, as reported by the Financial Times, a government official hinted that the government would formally invite applications for the EV tariff reduction scheme by the end of this month. Under this scheme, eligible companies will be allowed to import up to 8,000 vehicles a year, showcasing the potential growth in the sector.
Concludingly, this deal will have a positive impact on the Prime Minister’s Lok Sabha 2024 elections campaign.
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