Tesla CEO Elon Musk has confirmed plans to invest in India "as soon as humanly possible" following a meeting with Indian Prime Minister Narendra Modi in New York. Although Musk did not disclose a timeline, he assured reporters that the company will be in India and that he tentatively plans to visit the country next year.
The announcement marks progress in Tesla's push into the Indian market, which has been delayed for years due to its efforts to negotiate lower import duties with the local government. Tesla has been seeking to slash the duties, but Indian officials are reportedly insisting on local car production before considering any tax breaks.
During their meeting, Modi encouraged Musk to make significant investments in India and assured him of the government's support. Musk said that he had a "fantastic meeting" with Modi and feels excited about the future of India.
Tesla currently has only one gigafactory in Asia, which is located in Shanghai. The Shanghai factory is the company's largest car manufacturing plant outside the United States, accounting for more than half of Tesla's global deliveries in 2022.
Last month, Musk said that the company would likely announce a location for a new factory by the end of the year and that India was a compelling option. China and India are actively trying to attract investment in the electric vehicle (EV) industry, and both have been offering tax breaks and other incentives to boost sales and production.
In China, the government has extended tax breaks for consumers purchasing new energy vehicles (NEVs), including battery electric cars, plug-in hybrids, and fuel-cell vehicles, through 2027. The current policy provides a purchase tax exemption on NEVs until the end of 2023.
The tax breaks are expected to amount to CNY 520 billion ($72.3 billion) from 2024 to 2027, according to Xu Hongcai, China's vice minister of finance. The move follows a State Council meeting earlier this month, during which officials pledged to study policies to promote NEV development and optimize tax exemption.