Elon Musk choosing India over China? Big meet to decide Tesla’s road to New Delhi

Elon Musk’s Tesla, in a bid to diversify its supply chain beyond China, has eyed India as the next potential spot of manufacturing. A group of senior Tesla executives next week will reportedly meet officials in Prime Minister Narendra Modi’s administration. 

The meeting will be held to discuss local sourcing of components for Tesla’s models, Bloomberg reported while citing people familiar with the matter.

Tesla’s road to India and a Chinese stumble

Tesla has not yet entered the world’s fifth largest economy. 

While Elon Musk has criticised what he said were India’s high import taxes, India is averse to the idea of letting Tesla sell electric vehicles made in China. 

In April 2022, speaking at Raisina Dialogue in New Delhi, India’s road transport minister Nitin Gadkari said that Tesla’s proposition of “manufacturing in China and selling in India” cannot be an acceptable one. 

He said, “If Elon Musk is ready to manufacture in India, we have all the competencies and technology. Our request to him is to manufacture in India. India is a huge market, we have ports here. He could make in India and export all over.”

ALSO WATCH | India: Tesla shouldn’t import cars from China, says India’s road transport minister Nitin Gadkari

At the same time, while Tesla has found it difficult to break into India, its global rivals such as Mercedes-Benz AG have taken steps to sell locally assembled cars. They are betting on rising demand for electric vehicles in what is the world’s most populous country and an automobile market with high growth potential.

Tesla executives India visit: Who will meet whom?

The visitors are set to include C-suite executives and managers from Austin, Texas-based Tesla’s supply chain, production and business development teams. 

The executives are expected to reiterate Tesla’s request for India to cut import taxes on its vehicles, Bloomberg reported while citing people familiar with the matter.

Among other American companies, Apple has carved out India as an alternative manufacturing base and now produces 7 per cent of its global smartphone output in India.

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