Tesla to scout sites in India for $2 bln-$3 bln EV plant, FT reports

(Reuters) – Tesla will send a team to India this month to scout locations for a proposed $2 billion to $3 billion electric car plant, the Financial Times reported on Wednesday.

Tesla’s reported push into India comes at a time when EV demand is slowing and competition heats up in its main markets of the U.S. and China, causing the EV maker to report a drop in first-quarter deliveries and missing estimates.

The company will send a team from the United States by late April to study sites for the plant, with a focus on states that have automotive hubs such as Maharashtra, Gujarat and Tamil Nadu, the report said, citing people familiar with the matter.

Tesla did not immediately respond to a Reuters requests for comment.

India last month lowered import taxes on certain electric vehicles produced by carmakers that commit to invest at least $500 million and start domestic manufacturing within three years.

The EV maker’s CEO Elon Musk has been trying to enter the Indian market for years but New Delhi wanted a commitment to local manufacturing.

Tesla officials have been in talks with government officials over the last year, with Musk meeting Prime Minister Narendra Modi in June.

The company said in July last year that it was interested in building a factory in India to produce an EV priced at $24,000. It also called for lower taxes on more expensive models it wants to sell in India, Reuters has reported.

Tesla’s potential entry into the Indian market may spur further EV investments and may benefit auto parts makers based in India, analysts have said.

Reporting by Chandni Shah and Akash Sriram in Bengaluru; Editing by Shilpi Majumdar