Government Proposes Automatic PLI 2.0 to Bring Tesla to India

According to official sources, the modification or launch of PLI 2.0 is not something new that is done solely to include Tesla in the scheme, as has been done for PLI schemes for telecom products and IT hardware. No. On Wednesday, the cabinet approved a new IT hardware PLI scheme aimed at giving global companies a second chance to invest in the country. Similar modifications will be made to the car and battery PLIs once everything is finalized between the government and Tesla, the people said.

The current expenditure on advanced chemical batteries is Rs 1,810 billion and that on automobiles and auto parts is Rs 2,593.8 billion. The two companies’ revised PLI schemes could see higher spending, fine-tune incentives and give participants the option to transition to the new plans, according to people familiar with the matter.

“This is fair for all parties and the PLI scheme offers this much flexibility in restructuring the package,” the official said.

Tesla is now considering manufacturing in India and is no longer pushing its previous demands to first lower import tariffs on finished cars (100% for cars over $40,000). The tariff on cars priced below this is 60%. Tesla’s request was to reduce tariffs to 40%. FE