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April 3 (Reuters) – Tesla will send a team to India this month to scout sites for a proposed $2 billion to $3 billion car factory, the Financial Times reported on Wednesday.
Tesla’s announced entry into India comes at a time when demand for electric cars is slowing and the festival is intensifying in its key markets, the United States and China, prompting the EV maker to report a decline in first-quarter deliveries and no estimates.
The company will send a U. S. team until the end of April to examine the plant’s sites, focusing on states with automotive hubs such as Maharashtra, Gujarat and Tamil Nadu, according to the report, citing other people familiar with the matter.
Tesla did not respond to Reuters’ requests for comment.
Last month, India cut import taxes on some electric cars produced by automakers that pledge to invest at least $500 million and start domestic production within three years.
The CEO of the electric vehicle maker, Elon Musk, has been looking to enter the Indian market for years, but New Delhi was looking to participate in local manufacturing.
Tesla has held talks with the government over the past year, and Musk met with Prime Minister Narendra Modi in June.
The company said in July last year that it needed to build a factory in India to produce an electric vehicle worth $24,000. He also called for a tax cut on the most expensive models he wants to sell in India, Reuters reported.
Tesla’s potential access to the Indian market could spur additional investment in electric cars and could benefit India-based auto parts makers, analysts said.
(Reporting via Chandni Shah and Akash Sriram in Bengaluru; editing via Leslie Adler)