Hyperdrive
India Wants Tesla to Buy $500 Million of Local Auto Parts
- U.S. carmaker could start lower, ramp up at least 10% a year
- Tesla, Indian government at an impasse on carmaker’s entry
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Tesla Inc. would need to commit to sourcing at least $500 million of auto components from India for the electric carmaker’s request for an import tax cut on its vehicles to be considered, a person familiar with the government’s thinking said.
While it could start at a lower base, Tesla would need to agree to ramp up Indian parts purchases by around 10% to 15% a year until a satisfactory level was achieved, the person said, asking not to be identified because the discussions are private. The administration of Prime Minister Narendra Modi has formally told Tesla to ramp up domestic sourcing, but is yet to relay a procurement target to the company, the person said. Tesla in August claimed it sourced around $100 million in parts from India.