India minister asks Tesla not to sell China-made electric cars in South Asian nation

Tesla should ‘make cars in India, sell in India and export from India’, said Nitin Gadkari, the country’s Minister for Road Transport and Highways
The American electric car maker currently produces vehicles in factories in the US and China, and is awaiting final approval for a new plant in Germany

Tesla

Bloomberg

Published: 4:29pm, 10 Oct, 2021

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India’s Minister for Road Transport and Highways, Nitin Gadkari, said he asked Tesla to avoid selling its China-made cars in the country, ahead of the electric vehicle (EV) maker’s expected entry into the South Asian nation.

Tesla should “make cars in India, sell in India and export from India”, and rely on local suppliers, Gadkari said. Tesla models in India will cost 3.5 million rupees (US$46,671) each and the government will provide whatever help the US carmaker needs to make a foray into the nation, he added during a public event on Friday.

The California-based carmaker said in August that it has received approval to make or import four EV models in India, according to a posting on the website of the country’s road transport and highways ministry.

Tesla currently produces vehicles in factories in the US and in Shanghai, China and is awaiting final approval for a new plant in Germany.

Nitin Gadkari, India’s Minister for Road Transport and Highways, says Tesla must manufacture its electric cars in the South Asian country. Photo: Hindustan Times

India is trying to diversify its supply chains away from neighbouring China following deadly clashes between the world’s two most-populated nations along the disputed Himalayan border last year. The Covid-19 pandemic and global trade tensions with China have intensified the need for countries around the world to move manufacturing bases out of the country to reduce supply-chain risks.

Ahead of Tesla’s potential manufacturing foray in India, chief executive Elon Musk said the firm’s new electric car plant near Berlin is expected to start producing EVs as early as next month even as it still awaits final approval for the project, which has been delayed by legal challenges.

The factory is to begin making Model Y cars in November or December, Musk said on Saturday during a visit to the site in Gruenheide, where Tesla hosted thousands of locals at an Oktoberfest-style county fair. The plant is likely to source batteries from Tesla’s facilities in China until a cell factory in Germany is completed, he said.

“The start of production is nice, but volume production is the hard part,” Musk said, adding that Tesla targets making between 5,000 and 10,000 vehicles a week at Gruenheide, located east of Berlin, by the end of next year. “We are going to need a lot of talented, hardworking people to get there.”

01:16

Tesla exports first China-made cars to Europe with shipment of 7,000 Model 3 electric sedans

While Musk’s visit marks the German factory’s final stretch of construction, Tesla is still awaiting final approval for the project that underpins its European expansion plans just as Volkswagen, Daimler and BMW broaden their EV line-ups. For Germany, the plant promises new jobs in a region that lost most of its heavy industry during World War II.

Progress at Gruenheide has been less smooth than hoped, with Tesla facing lawsuits from environmental groups concerned about water use and wildlife, and the plant has been delayed by several months. Tesla eventually plans to make as many as 500,000 vehicles at the factory, alongside production of battery cells.

Locals have filed more than 800 complaints that are currently being discussed via an online consultation process that is to last until October 14. The region’s environmental authorities have vowed to make a decision on final approval only after that process ends.

Elon Musk hosts bash at Tesla factory in Germany

Still, the mood at Tesla’s open house in Gruenheide was festive, with photos posted on social media showing visitors lining up for Model Y test rides, a Ferris wheel and tours of the factory’s interior.

In a nod to some of the environmental opposition, Musk said Tesla will plant more trees than it has cut down and make sure the factory uses as little water as possible.

Musk said he aims to introduce more Tesla products in Europe next year, including its solar roof and its so-called Full Self-Driving system (FSD).

“It’s looking highly likely to be in Europe next year,” he said of FSD.

While FSD is designed to someday handle trips without driver intervention, Tesla said it is not yet capable of rendering its electric cars autonomous.

This article appeared in the South China Morning Post print edition as: Tesla asked not to sell China-made cars in India