Tesla’s (NASDAQ:TSLA) has long been a subject of discussion regarding its potential entry into the Indian market. With India reducing import duties on electric vehicles to attract prominent EV manufacturers like Tesla, this strategic decision aligns with the country’s efforts, coinciding with upcoming national elections.
Minimum Investment to Unlock Tax Benefit
According to Bloomberg, EV producers will need to invest a minimum of $500 million and commence production in India within three years to qualify for the tax benefits. The tax on imported EVs priced at $35,000 has been reduced to 15%. Companies pledging investments exceeding $800 million are eligible to import up to 8,000 EVs annually in India.
Tesla Considered Setting Up Production Facility in India
Earlier reports indicated that Tesla was considering setting up a production facility in Gujarat, India. However, CEO Elon Musk has cited concerns about the country’s high tax structure as a deterrent to investment at present. Despite the increasing electric vehicle (EV) sales in India, which currently represent only a small fraction of the total passenger vehicle sales in the country with the largest population globally, this situation further compounds Musk’s hesitation. In contrast, the advantageous tax environment in India has favored Vietnamese EV manufacturer VinFast (NASDAQ: VFS), which is actively establishing a facility in Tamil Nadu, a state in South India.
What Is Tesla’s Stock Forecast?
Tesla’s share price has plummeted by nearly 35% year-to-date. Analysts anticipate a potential upside of approximately 26.3% in the stock, reflecting a Hold consensus rating and an average price target of $205.22. Wedbush’s Daniel Ives is even more optimistic about Tesla, anticipating a nearly 94% upside in the EV maker.
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