- India is set to introduce a flexible application process for EV manufacturing under the SMEC policy, allowing companies like Tesla to explore the market before committing investments.
- Tesla is already searching for retail space and hiring staff in India, though it hasn’t confirmed local manufacturing plans.
- The new scheme allows companies investing $500 million in local production to import high-end EVs at reduced import duties.
Will Tesla Finally Set Up Shop in India?
India is making big moves to attract global electric vehicle (EV) manufacturers, and Tesla seems to be watching closely. Under the upcoming Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC), international EV makers like Tesla will be able to test the Indian market before fully committing to setting up factories. This move is expected to provide companies with more flexibility while ensuring a smoother transition into the Indian auto sector.
Elon Musk’s Tesla has already started scouting for retail locations and hiring staff in India. However, the company has not yet announced any local manufacturing plans. The Indian government is reportedly considering extending the application window for the SMEC incentives, allowing automakers to apply multiple times. This means companies can first assess demand for their EVs and later decide on full-scale manufacturing investments.
What’s in It for Tesla and Other EV Makers?
India’s SMEC initiative, launched in March 2024, offers a major incentive—companies investing at least $500 million in local manufacturing will be allowed to import fully built electric cars worth $35,000 or more at a reduced 15% import duty for five years. This is a big shift from the usual high import taxes, which have been a major roadblock for Tesla’s entry into the Indian market.
With the Indian EV market expanding rapidly and the government pushing for domestic production, Tesla has a unique opportunity to establish a foothold. If the policy proves favorable, Tesla may take the next step towards setting up a local factory—something Musk has hinted at in the past.
For now, all eyes are on the official SMEC guidelines, expected next month. If they align with Tesla’s business strategy, India could soon see its first Tesla showroom and, possibly in the future, a manufacturing hub.
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