Tesla, LG Energy, and Samsung are among a group of large battery manufacturers that have been invited to a recruitment summit by India, which wants to encourage cell production efforts to enter its market to develop a domestic supply chain for clean transportation and electric vehicles.
Indian officials will visit the United States, Germany, France, South Korea, and Japan, looking to convince large-scale battery manufacturers to set up production lines in India, sources told Reuters.
India has invited Tesla, LG Energy, and Samsung to the events, although a complete list of battery production companies has not yet been drafted nor confirmed. Northvolt, Panasonic, and Toshiba are also being targeted for the summit.
The meetings are part of an extensive plan to boost cell manufacturing efforts in India. The country is prepared to offer $2.4 billion in incentives to companies who are willing to commit to battery production in India. Companies have to set up 5 Gwh of storage capacity and meet specific local content conditions to qualify for the incentive. An investment of $850 million, according to the official.
Currently, domestic companies like Reliance Industries, Adani Group, and Tata Group have shown interest in launching production in India. There has not been much interest from other companies. India’s market share of electric vehicles is minimal, with only 5,000 units being sold in the country last year. 2.4 million vehicles were sold in India in 2020. Due to the lack of demand for electric vehicles in India, companies are focusing on building battery manufacturing lines in markets where EVs are gaining traction and momentum, like the United States and Europe.
There would be benefits if India could convince a company to invest in a battery manufacturing plant, one source said. “Getting global companies into India will signal seriousness, and they will also bring in good technology, quality, and safety standards.”
Tesla has been working with Indian officials since early 2021 to try and gain entry into the Indian market. However, the process has not moved forward like expected due to wishes on both sides that currently cannot be fulfilled. Tesla wants to test demand with imports from one of its other production facilities, but Indian officials are not interested in reducing hefty import duties that would make Tesla’s vehicles more affordable. India wants Tesla to commit to building a Gigafactory in the country before it considers bringing down the duties, but Tesla is unwilling to commit to the construction of the factory because demand statistics and research cannot be completed.
Tesla and India are still working to come to a deal, with each side inching toward an agreement that could eventually allow Tesla to test demand with reduced import duties. The automaker will have to meet India halfway, however.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at [email protected]. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at [email protected].
