The Chandrababu Naidu-led Andhra Pradesh government, which last year unsuccessfully tried to get the Elon Musk-headed Tesla EV car company to set up shop in the state, is reportedly wooing the company again with updated incentives.
The renewed efforts follows Prime Minister Narendra Modi’s meeting with Musk in Washington last week and Tesla’s announcement this week of hiring a few staff positions in India.
According to The Economic Times, the Andhra Pradesh government’s Economic Development Board (EDB) has highlighted its port connectivity and availability of land to attract Tesla. The authorities were also planning to offer several incentives, including the ready availability of land.
Initially, the state aims to assist the company in importing cars via its ports, The Economic Times said. In its pitch for wooing Tesla, the EDB reportedly claims that southern Andhra Pradesh has a “readymade ecosystem of auto companies, battery manufacturers and ancillary manufacturers,” which can be ideal for the company to set up the manufacturing plant.
In October, Andhra Pradesh’s IT minister Nara Lokesh visited Tesla’s headquarters in Austin, Texas, and reportedly had a meeting with its chief financial officer Vaibhav Taneja.
A few days back, Tesla planned to ship a few electric cars to a port near Mumbai over the coming months. It has also identified two locations for its showrooms in Delhi and Mumbai.
Tesla has long been wanting to enter the Indian market but has faced several barriers. In 2021, Musk expressed his concerns regarding the high import tax in India. The following year, it pushed the pause button on the India plan because of the high import tax.
Said to be part of addressing such concerns, the central government approved a new EV policy in March 2024. Under this policy, the import duty on vehicles with cost, insurance and freight (CIF) value of $35,000 or above will be reduced to 15% for five years. The tax relief is valid for the companies which agree to invest at least Rs 4,150 crore in India to set up manufacturing facilities.
Tesla had talks with Gujarat, Maharashtra, Tamil Nadu, and other states to set up its manufacturing unit. Meanwhile, Donald Trump reportedly has expressed concern over Tesla's plan to build India. Whether this would compel Elon Musk to rethink his India plan is yet unclear.
