Automobile Industry

Tesla Picks China Over India For Its First Factory Outside US

Tesla Master Plan, Part Deux

Putting a full stop to India’s hope, Tesla is reportedly working on setting up an agreement with China to build its first manufacturing unit outside US.

Putting a full stop to India’s hope, Tesla Inc. is reportedly working on setting up an agreement with China to build its first manufacturing unit outside US. According to the deal, the electric car manufacturer will build a wholly owned production facility in Shanghai’s free-trade zone, media reports suggest. While both, the company officials and the Shanghai government have refrained from commenting on the same, Tesla maintains that it plans to ‘clearly define’ production plans in China by the end of current calendar year. In a bid to allow Tesla Inc to set up a production unit in Shanghai, the government made an exception to allow building a wholly owned factory instead of setting up a joint venture. According to the Chinese manufacturing laws, it is requisite for foreign manufacturers to set up a joint venture with a local partner and split profit along with sharing some technology. Also See – Tesla Model X Is The Safest SUV With 5 Stars in Every Category

In March this year, Nitin Gadkari, transport minister of India, had offered a land near ports to Tesla for setting up a production facility in the country for exporting EVs to south and south-east Asian markets. While India is getting ready to mass shift to electric vehicles by 2030, the Chinese market is already one of the prominent EV markets globally and is estimated to grow further as the government plans to mandate some percentage of every automaker’s sale through EVs effectively from 2019.

As per Bank of America Merill Lynch, the sales of electric cars grew by 17.4% in China with 329,000 unit sold between 2013 to 2016 which accounts for almost 1.4% of total sales of fossil-fuel run vehicles. According to International Energy Agency, sales of EVs in India is a meagre 1% of the entire market. In terms of infrastructure, India currently has just 350 charging points opposed to China which has 215,000 charging stations.

Tesla Model 3 Pictures 

To encourage sales of EVs in India, the government reduced the total tax levied on EVs compared to hybrids and other fossil-fuel run cars. Before mass shifting to EVs by 2030, the government aims to build EV supporting infrastructure and is likely to roll out tenders for charging stations, electric three-wheelers and battery-powered buses within a year.

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