Tesla is reportedly eyeing a contract manufacturing deal in India as part of its entry strategy. The company is in discussions with Indian automakers about partnering with those with surplus production capacity. This move aligns with Tesla’s preparation for homologating its Model Y and Model 3 vehicles in India.
Tesla has been in talks with Japanese and Indian carmakers to utilize their surplus production capacity. The discussions are in early stages, with any partnership contingent on agreeing on mutually beneficial terms. Initially, Tesla will import fully assembled cars into India in its first year, bypassing the need to establish operations there.
Tesla considers contract manufacturing as an alternative to setting up a local plant in India for electric vehicles under the new policy, which demands a minimum $500 million investment for reduced import duties on up to 8,000 cars annually. The switch aims to cut costs and accelerate market penetration.
Tesla, with a global manufacturing capacity of 2.5-3 million units in the US, Germany, and China, opts to prioritize brand-building and sales infrastructure in India instead of opening a new manufacturing unit for a different market amid the global slowdown and oversupply challenges.
Tesla in India could position itself as a mid-range brand between mass-market and luxury, likely sourcing batteries from its German Gigafactory. Initially focusing on the premium segment, the company may introduce Model 3 and Model Y cars with prices expected to be over ₹40 lakh, bridging the gap between mainstream and luxury vehicles.
Sources News From Various Digital Platforms, Websites, Journalists, And Agencies.
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