by Aditi Shah and Aditya Kalra

NEW DELHI (Reuters) – Tesla (NASDAQ: ) representatives are set to meet India’s commerce minister this month to discuss plans to build a factory for what the company described as a brand-new $24,000 car, a person with direct knowledge of the matter told Reuters.

Tesla has expressed interest in building a factory in India that will produce low-cost electric vehicles (EVs) for the local market and exports, the person said, adding that the company had indicated it would be for the new vehicle.

The discussions represent a sharp reversal for the company after government officials committed to making cars locally following calls for efforts to reduce import taxes on EVs shipped to India last year.

The meeting with the commerce minister will be the highest level of discussion between Tesla and the Indian government since June when Elon Musk met India’s Prime Minister Narendra Modi and said he intended to make a significant investment in the country.

The 2 million rupiah ($24,000) EV Tesla representatives in discussions about a possible Indian plant is said to be 25% cheaper than its current lowest-priced offering, the Model 3 sedan, which sells for just over $32,200 in China.

A target price of $24,000 for the new Tesla vehicle was reported by the Times of India newspaper earlier this month.

Tesla did not immediately respond to a request for comment.

Electric vehicles currently account for less than 2% of total vehicle sales in India, which is now the third largest auto market in the world.

Reuters reported in May that Tesla executives visited India and held talks with officials on setting up a manufacturing base for cars and batteries in India.

Discussions with Indian government officials in New Delhi are set to resume this month, two people with knowledge of the talks asked not to be named because the discussions would remain private, they told Reuters.

As part of that, Tesla representatives are set to meet Indian Commerce Minister Piyush Goyal, the first person said, and discussions are expected to center around setting up an EV supply chain and discussing land allocation for a factory.

The commerce ministry did not respond to a request for comment.

Tesla has aggressively discounted its existing models since the beginning of the year, while Musk has repeatedly said that its long-term success will depend on driving down the cost of EVs quickly.

Tesla has said its next-generation vehicle platform will cut production costs by 50% and several models – including an automated “robotaxis” – could be built from it, without saying what those future models would be or how much they would cost.

The Tesla plant under construction in Mexico will produce vehicles on a low-cost, high-volume platform that the company has said it will roll out to other factories.

Tesla currently produces EVs in California and Texas. Outside North America, it has plants in Berlin and Shanghai.

The Shanghai plant is Tesla’s largest, accounting for about 40% of the automaker’s global capacity. Plans to add additional capacity there are pending regulatory approval.