Govt suggests Apple-like model for Tesla's India factory: Report

American electric car maker Tesla is considering building a factory in India to manufacture and sell affordable electric cars. However, this plan is witnessing another roadblock due to India's strained relations with China. Tesla relies on Chinese suppliers for components like battery cells, which are crucial for keeping costs low in producing affordable EVs.

According to a report by Reuters, Tesla has been discussing its plans with the Indian government, expressing its desire to have some of its Chinese vendors set up operations locally to strengthen its supply chain. However, Indian officials are cautious about granting approvals to Chinese companies due to the tense relations between India and China since a border clash in 2020.

The report suggests that in response to Tesla's demands, Indian officials have suggested that the EV maker follows a model similar to Apple's recent approach in India. Apple has successfully brought Chinese suppliers to India by partnering with local Indian companies in joint ventures. This workaround allows Chinese companies to establish a presence in India while addressing the government's concerns.

India has been selectively approving joint ventures between Chinese suppliers and Indian companies on a case-by-case basis. Tesla could potentially follow this route to pair local Indian players with Chinese vendors for its India factory. So far, the Indian government has not yet given a final response to Tesla's proposal.

It's important to note that India is cautious about allowing Chinese companies, particularly automakers, to expand in the country. Another Chinese automaker, BYD, had to shelve its investment plan to build EVs in India after facing scrutiny from the Indian government. However, there's no official policy that places a blanket ban on Chinese brands from setting up factories/outlets in India.

Tesla is reportedly planning to launch a brand-new car that will cater to the Indian market. This will be its most affordable option in the line-up with a expected price tag of under Rs 20 lakh. The American company may also look to export the car to other markets. However, details about the car and Tesla's dealings with the Indian govt are still scarce. Elon Musk, in an interview earlier this year said that India is an 'interesting' option for Tesla. The billionaire also met PM Modi during his state visit to the United States.

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