With Tesla proposing a manufacturing unit in India, the government intends to introduce a modified production-linked incentive system for electric vehicles and advanced chemical cell batteries in order to attract new investments from companies that have not previously participated.

According to official sources, changing or releasing a PLI 2.0 will not be a new thing that will be done solely to include Tesla in the scheme, as it has previously been done for telecom devices and IT Hardware PLI schemes. The Cabinet approved the new IT Hardware PLI plan on Wednesday, providing global corporations another opportunity to invest in the country. According to reports, after everything is finished between the government and Tesla, a similar adjustment will be made to the auto and battery PLI.

The present investment in advanced chemical cell batteries is Rs 18,100 crore, whereas the investment in vehicles and auto components is Rs 25,938 crore. According to sources, the outlay under the updated PLI scheme for the two might be increased, incentives could be changed, and participating enterprises would be given the option to transfer to the new one.

"It will be fair to all parties, and PLI schemes offer such flexibility in restructuring the package," stated an official.

Tesla is reportedly exploring manufacturing in India and is no longer lobbying for a reduction in import tariff on fully completed units, which is currently set at 100% for cars costing $40,000 or more. The duty on cars costing less than this is 60%. Tesla had requested that the duty be reduced to 40%.