Tesla and Reliance Industries Ltd. are currently engaged in preliminary discussions regarding the establishment of an electric vehicle (EV) manufacturing plant in India, as reported by Hindu BusinessLine.

Elon Musk, CEO of Tesla, is set to visit India and meet with Prime Minister Modi this month. Sources indicate that Musk will make announcements regarding Tesla’s plans for a plant in India and potential investments during his visit.

Tesla and Reliance Industries in Talks to Forge EV Manufacturing Venture in India

While the extent of Reliance’s involvement has yet to be finalized, the conglomerate led by Mukesh Ambani is anticipated to play a significant role in facilitating Tesla’s entry into the Indian market, according to sources cited by the newspaper.

Senior officials from Tesla are expected to visit India within the next month to finalize key aspects of the project, including the selection of a suitable location for the manufacturing facility and the structure of the joint venture.

Last year, Tesla’s CEO, Elon Musk, expressed the company’s intention to make a substantial investment in India, aligning with the government’s efforts to attract foreign EV manufacturers. Bloomberg News previously reported that India was negotiating an agreement with Tesla that would require an initial investment of approximately $2 billion to establish the manufacturing plant.

Additionally, Tesla aims to enhance its commitment to India by increasing its procurement of auto parts from the country, potentially reaching up to $15 billion, thereby aligning with India’s incentives to promote domestic manufacturing within the EV sector.

This strategic move by Tesla underscores its ambition to capitalize on the burgeoning EV market in India, where electric vehicles currently represent only a small fraction, approximately 2.3%, of total passenger vehicle sales.

Following the recent unveiling of India’s new EV Policy, reports emerged indicating Tesla’s plans to introduce vehicles destined for the Indian market from its Gigafactory located in Germany. Under the updated import regulations in India, a 15% tax will be imposed on a maximum of 8,000 cars annually, provided they are priced above $35,000.

Companies establishing manufacturing units for EVs will be permitted restricted imports of vehicles with reduced customs duties.

A minimum investment of ₹4150 crore ($500 million) is mandatory, with no ceiling on maximum investment.

The government stipulates a 15% customs duty on knock-down EVs for vehicles valued at a minimum of $35,000.

The government indicates that a maximum of 40,000 EVs will be allowed at a lower import rate if the investment exceeds USD 800 million.


Elon Musk has delayed his planned trip to India, originally scheduled for April 21-22, citing “very heavy Tesla obligations.” This postponement coincides with Tesla’s upcoming Q1 earnings announcement on April 23, amidst a recent drop in share prices. Musk’s visit was expected to involve discussions with Prime Minister Narendra Modi, potentially revealing plans for investment and manufacturing in India, including a possible $2-3 billion investment for a new factory.

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