According to a source with firsthand knowledge, Tesla Inc. (TSLA.O) proposed building an electric car factory in India for domestic and international sales on Wednesday.
The proposal was made in response to India’s refusal to cut the import tariff on cars, which can be as high as 100%, as requested by Tesla last year. The talks broke down because Tesla wanted to import cars first to test the market, while India wanted the automaker to produce cars locally.
According to the person, who declined to be named because the discussions were private, Tesla proposed opening a new facility to Indian officials but did not identify a site or investment.
Local auto manufacturing fits well with Indian Prime Minister Narendra Modi’s “Make in India” campaign push to businesses, particularly as businesses seek to diversify their supply chains outside China.
According to Reuters on Tuesday, senior Tesla executives are meeting with the government in India this week to discuss local part sourcing and other matters.
According to the individual and a different source, Tesla met with representatives from Modi’s office and other ministries on Wednesday. Tesla declined to comment when Reuters requested it.
Nearly a year after postponing its ambitions to sell vehicles there due to its inability to negotiate reduced import taxes—which CEO Elon Musk claimed to be among the highest in the world—the electric carmaker has now expressed a renewed interest in the market.
Last year, Tesla also abandoned plans to find a showcase facility after hiring local staff and starting the search. The meeting occurred months before Modi’s trip to the US in June.
