Electric vehicle maker Tesla is expected to source automobile components worth about $1.9 billion from India this fiscal year, commerce minister Piyush Goyal said in New Delhi on Wednesday.
Speaking at the 63rd Automobile Component Manufactures’ Association of India, Goyal said Tesla had bought components worth $1 billion from Indian vendors last fiscal.
“As auto component production in India hits the large scale bracket, manufacturers will start enjoying the fruits of economies of scale,” Goyal said, adding that “this step will boost investment in research and development.”
“Once that happens, the component industry will serve the domestic market and cater to the increasing auto exports from India,” Goyal said, adding that other global auto manufacturers have also shown interest in coming to India.
Tesla is still to announce its plans for starting production in India. Elon Musk, Tesla’s founder, had met Prime Minister Narendra Modi in June in New York.
Musk had then said that he was “incredibly excited about the future of India”, and added that “India had more promise than any large country in the world.”
In May, Reuters reported that Tesla has proposed a plan to set up a factory to build its vehicles for domestic sales and export.
In July, The Times of India reported citing unidentified people in the government that Tesla was pursuing a plan to make up to 500,000 EVs annually, with prices starting at ₹20 lakh.
Later, in August, Tesla India Motors and Energy Pvt. Ltd leased an office space in Maharashtra. Senior officials from Tesla had made several trips to government offices for meetings, but no announcement on the EV maker’s India plans has come through yet.
In February last year, India had turned down Tesla’s demand for tax breaks to import electric cars, and instead encouraged the EV maker to produce locally.
In response to a query on X (formerly Twitter), Musk had said that Tesla would “not put a manufacturing plant in any location where we are not allowed first to sell and service cars.”
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