It seems like Prime Minister Narendra Modi’s recent visit to Tesla Motors’ factory in Fremont, California, hasn’t really impressed the carmaker’s CEO Elon Musk to think of opening a plant in India. The Wall Street Journal has reported that Tesla will start building autos in China as a way to offer its cars to the country at lower prices. The company is expected to make an announcement in this regard soon.
In September this year, the Prime Minister visited Tesla Motors’ campus and showed keen interest in some of their path breaking inventions, particularly the company’s solar Powerwall technology, which can be extremely useful in India’s remote rural areas. Modi and Musk also discussed the possibility of a more affordable car from the company. However, the company hasn’t found India interesting from the manufacturing perspective.
Musk believes opening a production facility in China
could cut the cost of Tesla cars by a third due to reduced shipping costs and lower import fees. Tesla CEO also has a good reason for starting manufacturing facility in China, as it is currently the world’s largest car market, with almost 20 million cars sold last year.
Given China’s push for low emission cars and the rising demand for green vehicles, the move seems to come at the right time for the electric vehicle maker. The Chinese government is also incentivising the purchase of electric cars, with a goal of having half a million electric cars on the roads by the end of 2015 and five million by the end of the decade.
Doing well in China would help the company attain its target of delivering 55,000 vehicles globally in 2015. The company had opened a showroom in Beijing in November 2013.
At the moment, Tesla cars carry a massive cost, with the base Model S starting at over $100,000. Tesla manufactures most of its cars in California, but has recently opened an assembly unit in Tilburg, The Netherlands. Tesla recently released a software update to its Model S car that allows the car to drive itself in certain situations, such as on the highway.