Govt's talks with Elon Musk's Tesla to gain momentum after general elections: Report

However, the talks are expected to regain momentum after the elections, the report said, citing a senior government official.

There were widespread speculations suggesting that the talks between the Indian government and Tesla were nearing conclusion and that the EV manufacturer had chosen India as the location for its next manufacturing facility.

In December 2023, Gujarat Cabinet Minister Rushikesh Patel expressed strong optimism regarding Tesla's potential arrival in Gujarat, stating that the state government is eagerly anticipating the company's presence.

Tesla is reluctant to enter India as the Indian government is not allowing its demands for tariff cuts on imported electric vehicles (EVs).

India is reportedly looking for the US-based firm to establish a manufacturing unit here and increase its sourcing of components from the country.

India imposes a 100 percent duty on fully imported cars valued at over $40,000 CIF (Cost, Insurance, and Freight). For cars valued below this threshold, the duty imposed is 70 percent.

India may consider offering some concessions to Tesla once the talks resume, the report quoted the official as saying, adding that the government will not bend over backward for Tesla’s foray into the country.

However, Tesla officials have pointed out to the Indian government that Tesla cars may not have a huge market in India as EV sales are still low in the country now, the official said.

In May 2021, the government-sanctioned Rs 18,100-crore Production Linked Incentive (PLI) scheme aimed at fostering the production of Advanced Chemistry (ACC) batteries.

These batteries are capable of delivering greater power compared to traditional lithium-ion batteries, rendering them well-suited for utilization in electric vehicles.

It's noteworthy that approximately 30-40 percent of the manufacturing cost of an electric vehicle is attributed to its battery.