American automotive and energy company Tesla Shows Interest In Setting Up A Battery Plant In India

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The government has been pretty vocal about pushing India to an all-electric future. A future, wherein it’s not only an international hub for manufacturing electric vehicles but also the batteries that power them. In recent developments, Tesla amongst a few other firms has shown an interest in setting up battery manufacturing plants in India.

According to a report by LiveMint, two government officials aware of the matter have disclosed that China’s BYD Co. Ltd and Contemporary Amperex Technology Co. Ltd are the other two companies that have shown initial interest in setting up factories to make lithium-ion batteries at an investment of about INR 50,000 crore.

1-gigawatt of battery capacity can power 30,000 electric cars and power 1 million homes for an hour.

The plan to set up these 50-gigawatt hour (GWh) factories has been cleared by the EFC and will now come up in the cabinet for approval. Clearances from the cabinet are expected by September after which an international tender will be floated. The minimum ceiling for bidding is 5GWh and the maximum is 20GWh. According to the government officials mentioned above, the evaluation and approvals won’t take time and the final tender can be expected to be awarded by February next year.

These factories will be key in making EVs affordable in India as batteries account for up to 1/3rd of the cost of an EV. Reducing battery costs through rapid scaling of production and standardization of battery components will be key in having an electric-only future.

While Tesla has shown interest in India’s battery plans, it’s still to launch its electric vehicles in India. Elon Musk has cited “challenging government regulations” and “extremely high” import duties as the reasons for its absence in one of the largest automobile markets in the world.The Union Budget brought some relief to prospective EV owners by reducing the GST rate from 12% to 5% and by providing tax benefit of up to INR 1.5 lakh on the interest paid on loans taken to purchase EVs.

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