U.S. electric carmaker Tesla is currently scouting potential showroom locations in New Delhi and Mumbai as part of its preparations to commence sales in India later this year, according to two individuals familiar with the discussions.

In its endeavor to expand into new markets, Tesla aims to establish showrooms spanning 3,000 to 5,000 square feet (280-465 square meters) in each city, along with service hubs, as outlined by one of the sources familiar with the plans.

Production of right-hand drive cars destined for export to India has already commenced at Tesla's plant in Germany, as indicated by separate sources.

India recently slashed import taxes on electric vehicles to 15% from as high as 100% for automakers investing at least $500 million and setting up a factory.

Tesla's CEO Elon Musk is anticipated to announce an investment and meet Prime Minister Narendra Modi during his two-day visit to India starting Sunday. Musk and Modi previously met in New York in June.

Tesla executives initiated location scouting last month and have engaged in discussions with various real estate developers to explore potential sites on high streets and in malls, according to one of the sources. The company aims to expedite construction to ensure that the showrooms can open by 2024.

The sources requested anonymity as the discussions are confidential. Tesla has not yet responded to a request for comment.

Tesla is currently contending with slower growth in electric vehicle demand in its primary markets of the United States and China. Reuters recently reported that Tesla has scrapped plans for a long-awaited affordable car that investors had anticipated would drive mass-market growth.

However, demand for electric cars in India, the world's third-largest auto market, is projected to surge rapidly. Although EVs accounted for just 2% of India's total car sales in 2023, the government aims for electric vehicles to make up 30% of all new car sales by 2030.