Tesla to discuss India factory for Rs 20 lakh EV with commerce minister: Report

• Tesla will speak with Piyush Goyal, the commerce minister, about the proposed EV facility.
• A cheaper electric vehicle will be produced in India by Elon Musk's business.
• Move signifies a profound change in Tesla's strategy for the Indian market.

According to news agency Reuters, Tesla representatives will meet with India's commerce minister Piyush Goyal to discuss a plan to establish a factory in the country to produce its least expensive electric car (EV), which costs Rs 20 lakh.

The projected EV is anticipated to be considerably less expensive than Tesla's current entry-level vehicle, the Model 3 sedan. Currently, the Model 3 costs slightly more than Rs 26 lakh in China, making the new EV about 25% less expensive.

This pricing plan is consistent with Tesla's dramatic price cuts on its current models since the year's beginning and CEO Elon Musk's frequent claims that the company's long-term success depends on lowering the price of EVs significantly.

While a rumour from earlier this month said that Tesla intended to produce vehicles with beginning prices of Rs 20 lakh, the electric vehicle manufacturer has not officially acknowledged any information regarding the lower pricing.

Despite India being the third-largest auto market in the world, EV sales there currently only make up less than 2% of all vehicle sales.

This action marks a fundamental change in Tesla's strategy for the Indian market. Last year, government authorities' reliance on local production stymied the company's efforts to lower import duties on EVs transported to India.

Tesla appears to have abruptly changed course and now supports the notion of local production.

According to Reuters, Tesla executives visited India in May and had preliminary discussions with government representatives about establishing a base for producing cars and batteries there.

The focus of this month's discussions will be on developing an EV supply chain and talking about land allocation for a business.

It is also important to note that since Elon Musk's meeting with Prime Minister Narendra Modi in June, the meeting with the commerce minister will mark the greatest level of communication between Tesla and the government. Musk declared his ambition to make a sizable investment in India during this discussion.

The aspirations of Tesla go beyond only making EVs in India. According to the company, the next-generation vehicle platform will reduce production costs by 50% and can support a variety of models, including an autonomous "robotaxi."

This low-cost, high-volume platform will be used by Tesla's factory that is now being built in Mexico to make cars, and the company plans to use it in other facilities as well.

Tesla currently has factories in California and Texas as well as additional ones in Berlin and Shanghai where EVs are made. The largest Tesla facility, which makes up about 40% of the company's global capacity, is located in Shanghai. Regulatory approval is still required before expanding the location's capacity.