Ahmedabad: The highly anticipated arrival of Tesla, the pioneering electric vehicle (EV) maker, is finally nearing its destination. Reports indicate that the American company is poised to set up its first manufacturing plant in the western Indian state of Gujarat, marking a pivotal moment for the country’s burgeoning EV sector.
While an official announcement is expected to come at the Vibrant Gujarat Summit in January 2024, whispers of negotiations reaching their final stages have sent ripples through the industry. Gujarat, with its robust infrastructure, business-friendly policies, and proximity to ports, has emerged as the frontrunner in the race to host Tesla’s Indian dream. Locations like Sanand, Becharaji, and Dholera are being touted as potential sites for the factory, promising a potential hub for electric mobility in the making.
This isn’t just a win for Gujarat; it’s a game-changer for India’s EV ambitions. Demand for electric vehicles is increasing rapidly in the country. At present the share of electric vehicles in the Indian market is 2.4 percent. Tesla’s entry promises a much-needed boost to the ecosystem, attracting ancillary industries, creating high-skilled jobs, and injecting cutting-edge technology into the market. Consumers can expect a wider range of EVs, potentially at more competitive prices, thanks to local production.
Minister of State for Commerce and Industry Som Parkash had said that the government has sanctioned Rs 25,938 crore for the automobile and auto component industry. A production-linked incentive scheme was announced with a budgetary allocation of Rs. He said that its objective is to increase manufacturing of products with advanced automotive technology including EV in the country. There is no proposal to provide tax subsidy on import of EV.
Tesla had requested the government to impose 40 percent import tax on EVs. There is a tax of 60 percent to 100 percent on vehicles imported into the country. The government has asked Tesla to set up a manufacturing plant in the country and start manufacturing EVs. To reduce the cost of EV, the company also plans to manufacture batteries in the country.
But beyond the economic benefits, Tesla’s arrival symbolizes a crucial shift in mindset. It signifies India’s commitment to sustainable transportation, a move aligned with global green initiatives and crucial for combating climate change. The mere presence of a brand like Tesla will inspire confidence in the Indian EV market, attracting further investments and paving the way for domestic EV makers to thrive.
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