Elon Musk's Tesla To Discuss Low-Cost Car With Indian Government — Aims For A Price Below Model 3 in China: Report

This story was first published on the Benzinga India portal.

Electric car maker Tesla Inc TSLA is set to resume talks with the Indian government to establish a factory in the country to manufacture low-cost EVs, including a new $24,000 (INR 2 million) car.

What Happened? Tesla representatives are scheduled to meet India’s commerce minister this month to further discuss the plans, which include setting up an EV supply chain and land allotment for a factory, sources with direct knowledge of the matter told Reuters.

Tesla has been looking to make a foray into the Indian market as it makes an effort to diversify beyond China. It was previously reported that the US company plans to build up capacity to manufacture 500,000 cars in the country every year.

See Also: Tesla’s India Charge: Can Local Manufacturing Overcome Pricing, Charging Challenges?

Tesla has also reportedly been keen on bringing its own supply chain to the country and continues to push for tax breaks in the South Asian nation.

Why It Matters: The proposed $24,000 EV model would be 25% cheaper than Tesla’s current lowest-priced offering, the Model 3 sedan in China, which sells for over $32,200 (INR 2.6 million). The company aims to make significant progress in the Indian market and meet the country’s growing demand for electric vehicles.

This would be the highest-level meeting between Tesla and Indian government officials since Tesla CEO Elon Musk met with Prime Minister Narendra Modi in June and said he intended to invest significantly in the country.

Electric vehicles currently account for less than 2% of total vehicle sales in India, the world’s third-largest market for automobiles.

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