Tesla (NASDAQ:TSLA) could build a new factory in India, CEO Elon Musk revealed on Twitter (NYSE:TWTR). In the meantime, the electric car builder is negotiating with the Indian government in search of relief from the countryâ€™s taxes on imports.
Earlier this year, Musk said Tesla could introduce its vehicles to India by the summer of 2017. In May, he indicated that Tesla still wasnâ€™t ready, citing Indiaâ€™s manufacturing policies.
Musk surprised investors and prospective buyers in a new tweet late Wednesday. In response to a question from a Twitter user, the outspoken CEO said Tesla is in talks with India â€œrequesting temporary relief on import penalties/restrictions until a local factory is built.â€
Car imports are subject to a tariff of up to 100% in India, depending on the value of each vehicle.
Building a local factory would free Tesla from paying hefty taxes on cars sold in India. Other automobile manufacturers, including General Motors (NYSE:GM) and Ford (NYSE:F), have assembly plants there, although GM recently announced that it would transition its Indian facility into an export hub for other markets.
At Teslaâ€™s annual shareholder meeting last week, Musk said the automaker would likely need between 10 and 20 new factories to keep pace with demand.
India could be a key market for Tesla. The country is expected to become the third-largest global market for new vehicles, and Indiaâ€™s government adopted a plan to allow only electric cars to be sold by 2030.
In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built— Elon Musk (@elonmusk) June 14, 2017