Tesla has been in talks with India about car incentives and making batteries

NEW DELHI (Reuters) – Tesla Inc (TSLA.O) has held discussions with officials about incentives offered by India to make cars and batteries, said a person familiar with the talks, as the automaker looks fresh on entry. Indian market.

The US electric car maker has proposed setting up a factory in India to build electric cars, Reuters reported on Wednesday. The person with direct knowledge said that plans to manufacture electric vehicle batteries locally are also being discussed.

The person, who asked not to be named because the conversations were private, said Tesla was “still testing the waters and trying to understand local politics.”

During the visit, details of which were not disclosed by the company or any Indian ministry, Tesla on Thursday met India’s deputy information technology minister Rajeev Chandrasekhar, one of the top officials with whom the company has been in talks, a source in India said. Government.

Tesla and India’s Information Technology Ministry did not immediately respond to an emailed request for comment.

The Tesla delegation included Karen Bodhraj, a US-based chief supply chain executive, the two sources said.

The discussions in India mark a shift in the US electric car maker’s stance.

Late last year, it focused on seeking to reduce import taxes on cars, which could reach 100%, and talks with the Indian government hit a dead end. India is keen for Tesla to build vehicles domestically but the company has argued it wants to export first so it can test the strength of demand.

The first source said recent talks touched on India’s taxes on imported cars, but focused mainly on how Tesla could benefit from a government scheme.

India has allocated about $6 billion under two programs to boost electric vehicle sales and manufacturing. Under the schemes, car and battery manufacturers can receive certain cash-back incentives for selling and exporting locally made vehicles and parts.

said Mohan Shukla of New Delhi-based public policy advisor White Dolphin Media.

Tesla has described a goal of selling 20 million electric cars annually in 2030, a level that would require massive new investment in assembly plants and battery production.

Outside the United States, Tesla has a factory in Shanghai — its largest worldwide — and one in Brandenburg, Germany.

In addition to India, Tesla has held talks over the past year with officials in Indonesia and South Korea about potential investments.

India is the third largest car market in the world. Prime Minister Narendra Modi’s administration has set an ambitious target of electric vehicles accounting for 30% of all car sales in India by 2030 from about 1% today.

Tesla’s talks with India come at a critical time for Modi, who is looking to attract investment in the run-up to national elections next year in which he will seek a rare third term.

(Reporting by Aditi Shah and Aditya Kalra); Editing by Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.

Moncef Fengatel

Thomson Reuters

Moncef Vengatil is Reuters’ India technology correspondent based in New Delhi. It tracks how policymaking affects India’s technology business, and how the country is now competing more aggressively to be a force in the global electronics supply chain. He also regularly reports on the big tech giants, including Facebook and Google, and their strategies and challenges in the key Indian market.

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