New Delhi: Elon Musk’s Tesla will import electric vehicles to India and set up local factory in the country in the next two years, according to a report by Bloomberg News.
The US automaker has long been eyeing to explore one of the world’s most vibrant markets and talks to this end have been underway for long.
The official announcement of the agreement will take place in January at the Gujarat Global Summit, according to the report.
The states of Gujarat, Maharashtra, and Tamil Nadu are top among Tesla’s consideration, thanks to their ‘well-established ecosystems for electric vehicles and exports’.
Tesla is expected to shell out an initial investment of $2 billion for the plant and will source auto parts from India to the tune of $15 billion.
The report further said that the automaker is likely to manufacture some batteries in India to cut costs.
It is not yet known if these plans have been finalised as the report claim.
Tesla CEO Elon Musk had in June disclosed his company’s plans for a 'significant investment' in India alongside visit in 2024.
Tesla Inc.is coming to India as the country is seeing an increased demand for electric vehicles.
However, the country's EV market reported limited growth due to high upfront cost for EV cars and insufficient charging places.
The high import tariffs have so far caused Tesla not to import cars directly into India but manufacturing locally can help cut costs.
Tesla’s plans to set up local factory in India underscores PM Modi’s push for increasing local manufacturing of EVs under his ‘Make In India’ project.