Tesla India Motor and Energy Pvt Ltd, owned by Elon Musk, has signed a five-year lease agreement for office space in Pune’s Viman Nagar. This comes after the company officials met with Union Minister for Commerce and Industry Piyush Goyal last week to discuss plans for setting up a manufacturing plant for electric vehicles (EVs) in India. The lease agreement was signed in Panchshil Business Park. The meeting with the commerce minister was a significant step in the discussions between Tesla and the Indian government, which started in June when Elon Musk met Prime Minister Narendra Modi and expressed his intention to invest in India.
Tesla representatives revealed in the meeting that the potential Indian plant would produce EVs that are 25% cheaper than their current lowest priced offering, the Model 3 sedan, which sells for approximately $32,200 in China. According to The Times of India newspaper, the target price for the new Tesla vehicle is $24,000. Currently, electric vehicles constitute less than 2% of total vehicle sales in India, which is now the world’s third largest auto market. Tesla executives have previously discussed establishing a manufacturing base for cars and batteries in India, and the meeting with Union Minister Piyush Goyal is expected to focus on setting up an EV supply chain and allotting land for a factory. Tesla has been offering discounts on its existing models this year and has emphasized the importance of reducing the cost of EVs for its long-term success.
Tesla currently has manufacturing plants in California, Texas, Berlin, and Shanghai. Its Shanghai plant is the largest, accounting for nearly 40% of the company’s global capacity. Tesla has shown interest in building a factory in India to produce low-cost EVs for both the local market and export. However, the Indian government has made it clear that no concessions will be given for import taxes.