According to two Indian government sources, large battery manufacturers such as Tesla, LG Energy and Samsung Electronics have been invited to participate in the recruitment summit. India hopes to encourage battery manufacturers to enter the country’s market and invest in local factories to develop domestic clean transportation and establish an electric vehicle supply chain.
According to sources, Indian officials will begin visiting the United States, Germany, France, South Korea and Japan next month, hoping to persuade large battery manufacturers to establish production lines in India. Tesla, LG Energy and Samsung have been invited to participate in the event, although the full list of other battery manufacturers has not been drafted or confirmed. Northvolt, Panasonic and Toshiba will also be invited targets for the summit.
Such meetings are part of a broader plan to promote battery manufacturing efforts in India. The country is ready to provide US$2.4 billion in subsidies to companies willing to commit to producing batteries in India. However, these companies must build 5GWh of storage capacity and meet certain conditions to qualify for subsidies, such as an investment of US$850 million.
At present, Indian companies such as Reliance Industries, Adani Group and Tata Group have expressed interest in building factories in India, but other companies have little interest in this. The market share of electric vehicles in India is very small, with only 5,000 electric vehicles sold in the country last year. In 2020, India sold 2.4 million cars.
But thanks to government subsidies for automakers and electric car buyers, growth is accelerating. India plans that by 2030, electric vehicles will account for 30% of total car sales, and electric motorcycles and scooters will account for 40% of total sales. This is expected to drive a surge in battery demand. At present, batteries account for 35% to 40% of the total cost of automobiles, but they can be reduced through local production.
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Due to insufficient demand for electric vehicles in India, companies are focusing on building battery production lines in markets where electric vehicles are attractive and powered, such as the United States and Europe. But according to sources, even if India can persuade a company to invest in a battery manufacturing plant, it will have a positive impact. He said: Inviting multinational companies to enter India shows that the country takes the battery manufacturing industry very seriously, and these companies will bring better technology, quality and safety standards.
Since the beginning of 2021, Tesla has been in contact with Indian officials to try to enter the Indian market. However, because both parties have not fulfilled their demands, the process has not moved forward as expected. Tesla hopes to test plans to sell electric vehicles from other factories to India, but Indian officials are not interested in reducing high import tariffs, even if it helps lower Tesla car prices.
India hopes that Tesla will commit to building a factory in the country before considering tariff reduction, but Tesla is unwilling to commit to building a factory before demand statistics and research are completed. Tesla and India are still working to reach an agreement that may eventually allow Tesla to test demand by reducing import tariffs. However, Tesla will also have to compromise in some ways.