Elon Musk to visit India this week as fastest-growing economy seeks Tesla deal
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Tesla founder and social media platform X CEO Elon Musk is to visit India this week as both sides eagerly pursue a deal to bring the electric car manufacturer to South Asia.
Musk and Indian Prime Minister Narendra Modi met over the summer during Modi’s visit to the U.S., during which Musk revealed that he remains "confident that Tesla will be in India and will do so as soon as humanly possible."
Musk will meet with Indian Commerce Minister Piyush Goyal to go over potential details of Tesla’s entry into the Indian market, Reuters reported. Musk will look to build a Tesla factory in India, producing a $24,000 car that will source parts from across the country and look to establish charging infrastructure nationwide.
India started the year by not only overtaking the U.K. as the fifth-biggest economy in the world but beating Japan as the third-biggest vehicle market in the world, selling more than 4.25 million cars in 2022, according to The Times of India.
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The pace of growth has positioned India as the most attractive and lucrative market for electric vehicle (EV) manufacturers to invest in new facilities. The Economic Times reported tech conglomerate Mahindra & Mahindra earned a $9.8 billion valuation from Singapore’s global investment goliath Temasek due to overperforming in financial year 2023.
Indian Prime Minister Narendra Modi, right, meets with Elon Musk in New York on June 20, 2023. (Indian Press Information Bureau / Handout / Anadolu Agency via Getty Images)
A deal between India and Tesla, which ranks as the largest EV manufacturer in the world with a market cap of $800 billion, according to Reuters.
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Musk’s trip was not expected until next year, but moving the visit up to this year shows the eagerness with which both parties have looked to pursue a deal. After their meeting earlier this year, Musk said Modi has pushed Tesla to make a "significant" investment in India.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 345.16 | +12.27 | +3.69% |
| F | FORD MOTOR CO. | 11.13 | +0.03 | +0.27% |
| TM | TOYOTA MOTOR CORP. | 170.63 | +0.91 | +0.54% |
| RIVN | RIVIAN AUTOMOTIVE INC. | 11.63 | -0.60 | -4.91% |
India is also looking at reducing tax rates on imported EVs by around 15%, a significant drop from the current 100% that exists now. Modi held meetings with "various ministries" over the week to try and expedite the adoption of the policy.
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Tesla tried to push for a change in the tax rate in 2021 when it first tried to enter the Indian market, but talks collapsed over the government’s commitment to local manufacturing, Reuters reported.
A Tesla sign is seen on the Shanghai Gigafactory in Shanghai, China, on Jan. 7, 2020. (Reuters / Aly Song / File / Reuters Photos)
The policy’s adoption would rely on minimal impact to local carmakers, who argue the lower tax rate would disrupt the market and hurt them.
The India investment represents the most ambitious step in Telsa’s plans for global expansion, following the plan to build a new plant in Mexico, which the governor of Mexican state Nuevo Leon said would be among the biggest plants for the EV manufacturer and would go up "in record time," the New York Times reported.
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The Mexico plant – the fifth foreign one Tesla would have built – would cost $5 billion and employ up to 7,000 people, with its first cars produced as early as next year.
FOX Business’s Joe Toppe contributed to this report.