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Elon Musk to visit India to discuss the future of EVs

Tesla is likely to invest $2-3 billion to set up a factory to manufacture entry-level electric cars, to be priced around Rs. 25 Lakh

Elon Musk is to visit India this month, to meet Prime Minister Modi to discuss and expectedly, announce his investment plans to manufacture Electric Vehicles (EVs) in the country.

Elon Musk, the founder CEO, and CTO OF Space X and the CEO at Tesla, is evaluating the possibility of setting up a joint venture with Reliance Industries. This coincides with the West’s efforts to prevent Beijing from flooding the global markets with low-priced EVs, which inversely, could boost Indian industry. This action was taken days after US Secretary of Treasury Janet Yellen concluded a four-day long visit to China, warning Beijing to scale back production of EVs to avoid flooding and threatening American Companies from facing possible import tariffs from Washington.

Nimish Trivedi, CEO and co-founder, of Prakriti E-Mobility, said, “With both the US and Europe aiming to curb Chinese EV imports, India is emerging as a strong contender to become a top investment destination. This is fuelled by India’s rapidly growing EV market, projected to account for over 40% of the total automotive market and generate over $100 billion in revenue by 2030.”

Chinese EVs flooding the market pose a threat to the viability of American and other foreign firms. With the chance of Chinese EVs becoming more expensive due to possible tariffs, American consumers might seek alternatives, opening a door for Indian EV exports to the US and boosting domestic production. This could also contribute to less competition at home, leading to higher sales and market share.

Due to rising environmental concerns and fuel prices, there is a notable increase in EV consumption across the globe, thus, having a probability to solidify India’s position as an export hub. This surge in EV adoption is evident in sales figures for both electric two-wheelers and four-wheelers in 2023.

Mr Trivedi explains, “Global trends show a projected 24% increase in EV adoption by 2028. This presents a massive opportunity for India, not just domestically, but also as an export hub. The narrowing cost gap between Chinese and Indian manufacturing, combined with the increasing presence of Indian original equipment manufacturers (OEMs) in key markets like Latin America and Africa, positions India strategically for automotive component exports.”

Tesla is likely to invest $2-3 billion to set up a factory to manufacture entry-level electric cars, to be priced around Rs. 25 Lakh. It had indicated to make 5 lakh units annually. The company will be able to check the decline in sales and counter investor with an aggressively priced entry car in a growing market like India.

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