Tesla proposes building factory in India: Report

Tesla met with government officials in India on Wednesday, more than a year after discussions between the two parties broke down over the country’s high import taxes. During that meeting the automaker reportedly proposed building a factory in the country, indicating Tesla could be softening its stance on the matter.

For years Tesla has been attempting to enter the Indian market, but a major stumbling block has been the country’s high import taxes which can double the price of their cars. The high import taxes brought with it a complicated chicken and egg scenario in which Tesla said it wanted India to lower the taxes so it can test the level of demand for its vehicles in the country before committing to building a factory, while the government said it wouldn’t consider lowering the import taxes until Tesla committed to a major investment in the country.

It was this impasse that led to discussions between the two parties breaking down last year, but as we reported earlier Tesla sent a team of executives to India this week to meet with government officials. While neither Tesla nor the government has commented on the meeting, a source with direct knowledge of what was discussed told Reuters the automaker proposed building a factory in India.

According to the source, Tesla said the factory would produce cars for both domestic sales and exports.

Tesla has already announced where its next Gigafactory will be. Earlier this year CEO Elon Musk said they are going south of the border to Monterrey, Mexico. Construction of Giga Mexico is expected to be swift and could open next year, at which time it will start producing cars based on the automaker’s next-generation platform.

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