Gadkari's pitch comes weeks after billionaire Elon Musk's
Tesla registered a company in India in a step towards entering the country,
possibly as soon as mid-2021. Sources familiar with the matter have said Tesla
plans to start by importing and selling its Model 3 electric sedan in India.
"Rather than assembling (the cars) in India they should
make the entire product in the country by hiring local vendors. Then we can
give higher concessions," Gadkari said in an interview, without giving
details of what incentives would be on offer.
"The government will make sure the production cost for
Tesla will be the lowest when compared with the world, even China, when they
start manufacturing their cars in India. We will assure that," he said.
The country wants to boost local manufacturing of electric
vehicles (EVs), batteries, and other components to cut costly imports and curb
pollution in its major cities.
This comes amid a global race by carmakers to jump-start EV
production as countries work towards cutting carbon emissions.
But India faces a big challenge to win a production
commitment from Tesla, which did not immediately respond to an email requesting
comment about its plans in the country.
The nation's fledgling EV market accounted for just 5,000
out of a total 2.4 million cars sold in the country last year as negligible
charging infrastructure and the high cost of EVs deterred buyers.
In contrast, China, where Tesla already makes cars, sold
1.25 million new energy passenger vehicles, including EVs, in 2020 out of total
sales of 20 million, and accounted for more than a third of Tesla's global
sales.
India also doesn't have a comprehensive EV policy like
China, the world's biggest auto market, which mandates companies to invest in
the sector.
Gadkari said that as well as being a big market, India could
be an export hub, especially with about 80 percent of components for
lithium-ion batteries being made locally now.
"I think it's a win-win situation for Tesla,"
Gadkari said, adding he also wanted to engage with Tesla about building an
ultra high-speed hyperloop between Delhi and Mumbai.
India is drawing up a production-linked incentive scheme for
auto and auto component makers as well as for setting up advanced battery
manufacturing units, but the details are yet to be finalised.
Switching to cleaner sources of energy and reducing vehicle
pollution are seen as essential for India to meet its Paris Accord climate commitments.
India last year introduced tougher emission rules for
carmakers to bring them up to international standards. It is now looking at
tightening fuel efficiency rules from April 2022, which industry executives say
may compel some automakers to add electric or hybrid vehicles to their
portfolios.
Battered by the COVID-19 pandemic, the industry says it
needs longer to make the transition.
Gadkari said he was not directly responsible for making the
decision on whether to delay, but was confident India would meet its Paris
treaty commitments without disrupting economic growth.
"Development and environment will go hand in hand. We
will take some time but we will soon reach the international standard
norms," he said.
© Reuters
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