Tesla's India drive

The iconic electric carmaker wants to sell a ₹20 lakh car produced in an Indian giga-factory. Its ability to do so is an open question

- SURAJEET DAS GUPTA

In discussions with the government a few weeks ago, Tesla reportedly sprang a surprise. It said it would sell its electric car for ₹20 lakh in India and set up a plant with an annual capacity of 500,000 units.

With that, the company has sparked a new debate. It has models that retail at a starting price of around $41,900 (₹34.39 lakh) in the US and had lobbied for a duty reduction in completely built-up units (CBUS) imported from China just a year ago - which the Indian government rejected. Can Tesla make an electric car at this price? 

Tesla ambition Founder Elon Musk's to build a high-volume affordable car is not new. In 2020, Musk had announced that he would come up with a $25,000 (₹20.5 lakh) car in three years. That did not happen.

But the ambition to build a compact or subcompact car that has a large market in Asia and Europe fits in with broader ambitions. By 2030, the company plans to sell 20 million Teslas across the globe from a mere 1.3 million last year. So Musk will need to come out with car models that can be sold in large volumes.

To achieve this, Musk has clearly said he will need 10 to a dozen gigafactories beyond the five located in the US, China and Germany. One of them could be in India, though Musk has been scouting other venues from Indonesia to South Korea and Latin America.