Facebook According to a new report from Bloomberg, Tesla will import a few thousand cars to Mumbai, a port city in India’s western state of Maharashtra, in the coming months. The Model Y makes the most sense as the inaugural EV from the current portfolio, but local reports suggest the company may launch its upcoming rumoured ‘Model Q’ first instead. The Bloomberg article says Tesla’s decision about the models for India and their overseas sourcing location hinges on the outcome of the country’s ongoing tariff discussions with the US and whether the country reduces the tariff from the current maximum of 110%. After meeting Indian Prime Minister Narendra Modi at the White House last week, Elon Musk accelerated Tesla’s India entry plan, as per the Bloomberg report. Neither Modi nor Musk revealed what they discussed, but a revision in the Ministry of Heavy Industry (MHI)’s Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) is a strong possibility. Just a week after meeting Musk, the Modi government is considering allowing automakers to import up to 50,000 electric cars with a minimum CIF value of 35,000 dollars (approx. 33,000 euros) annually at a concessional 15% customs duty under the scheme, raising the current cap of 8,000. Such an amendment could be a shot in the arm for Tesla, which saw its sales dip last year for the first time in more than a decade. India also wants to reduce import taxes and allow companies to bring in some vehicles at lower import levies. To take advantage of SPMEPCI, automakers must invest at least 4,150 crore Indian rupees (approx. 456 million euros) in manufacturing electric cars locally and meet the scheme’s various other terms and conditions. The scheme does not count investments in existing plants, but according to a recent Times of India report, the government is considering allowing new assembly lines within current factories and counting them as eligible investments. After companies obtain approval for the scheme from MHI, they need to start manufacturing electric cars in India within three years. They have to achieve a minimum domestic value addition (DVA) of 25% within the same period and 50% within five years. The Times of India report says MHI will add a new requirement of generating a minimum turnover of 2,500 crore Indian rupees (approx. 456 million euros) in the second year of manufacturing, 5,000 crore Indian rupees (approx. 550 million euros) in the fourth year, and 7,500 crore Indian rupees (approx. 824 million euros) in the fifth year. The government will announce the final changes for SPMEPCI in a few weeks. Tesla to visit India soon, invest up to $5 bn Government officials familiar with the matter expect Tesla to visit India in April to discuss their strategy. The company will meet officials from the Prime Minister’s Office (PMO) and other main government bodies. The EV maker has expressed interest in establishing an Indian plant, and people in the know say it may initially invest three to five billion dollars (approx. 2.9-4.8 billion euros). India Today’s sources indicate that Tesla has shortlisted two locations for its Indian plant. The company is considering Chakan and Chhatrapati Sambhaji Nagar in Maharashtra, the cities where Volkswagen Group also operates local plants. Mercedes-Benz Group also operates a factory in Chakan and Mahindra opened a dedicated EV manufacturing and battery assembly facility at its Chakan plant just last month. Tesla is also considering Gujarat, another key automotive hub of India, located right above Maharashtra. Tesla plans to establish a retail presence in three major metro cities across India’s north, west, and south—Delhi, Mumbai (Maharashtra), and Bengaluru (Karnataka). There were already reports in December 2024 that the EV maker was scouting locations in New Delhi. The company plans to kick off sales around the third quarter of the year (July-September), aligning with the festive season, including Navratri and Diwali, a peak period for new vehicle sales. It has started finalising showroom locations and hiring people to manage showrooms, service centres, charging infrastructure, customer support, and even R&D.