Tesla's India Entry Takes Shape As US EV Maker Leases Office Space In Pune: Report

Tesla executives are currently in discussions with the government officials regarding the company's plans to enter the Indian market.

As part of the preparations for its India foray, the US-based electric vehicle manufacturer has picked up office space in Pune's Viman Nagar area.

The Indian division of Tesla, known as Tesla India Motor & Energy, has leased a 5,850 sq ft office in a coworking center located on the first floor of one of the towers in Panchshil Business Park.

The lease agreement will run for a total of five years, starting from 1 October with a lock-in period of three years.

Tesla India also has the option to renew the lease for an additional five years, making a total commitment of 10 years.

Under the terms of the agreement, Tesla will initially pay monthly rent of Rs 11.65 lakh, with a 5 per cent increase every 12 months. This will result in a total rental payout of Rs 7.72 crore over the entire lease period.

The deal was officially registered on 26 July, Economic Times reported citing the documents obtained through CRE Matrix.

Tesla has expressed interest in establishing an electric vehicle manufacturing factory in India and has been in discussions with the government regarding this matter.

Following a meeting with Prime Minister Narendra Modi in New York in June this year, Tesla's CEO Elon Musk announced that the company may soon establish a manufacturing base in India.

This marks a significant change in the company's position, as just a year ago, it stated that the high levies imposed by India on automobiles made it feasible to consider setting up a manufacturing factory only if imported models were successful.

Tesla has been eyeing the Indian market to sell its popular electric cars. It was previously reported that the company had requested a 40 per cent import duty on fully assembled electric cars, as opposed to the current rate of 60 per cent for cars priced below $40,000 and 100 per cent for those priced above that.

However, the government is not keen to grant any import duty concessions unless there is local investment involved.

India may also consider allowing Tesla's foreign vendors, particularly those from China, to produce critical components within the country.

However, the government is not inclined to provide specific exemptions for any particular company. This is significant because certain important parts of electric vehicles, such as battery cells, are currently imported from China.

Tesla has also shown interest in establishing its own supply chain ecosystem in India.

Pune is a major industrial hub in Asia housing over 4,000 manufacturing enterprises. These include electronics, engineering, automobile, and e-vehicle companies.

The automobile supply chain in Pune is well-developed, with major Indian vehicle manufacturers and ancillary companies heavily invested in state-of-the-art production facilities.

Notably, Mercedes-Benz India established its 100-acre production facility in Chakan back in 2009.