News Brief
Tesla To Begin Exploring Sites For $3 Billion EV Manufacturing Plant In India This Month: Report
Tesla's manufacturing plant (Representative Image)
Tesla Motors is reportedly set to send a team to India this month to explore potential locations for a proposed electric car plant to be build with an estimated investment of $2 billion to $3 billion.
This move by Tesla follows a recent decision by India to reduce tariffs on higher-priced imported electric vehicles (EVs) for companies willing to manufacture them in India within three years.
This tariff reduction was a demand that Tesla had been advocating for as a condition for its investment.
Tesla will send team from the US by late April to study sites for the plant, focusing on states with existing automotive hubs, including Maharashtra and Gujarat in the west and Tamil Nadu in the south, Financial Times reported citing people with direct knowledge of the electric vehicle company’s plans.
There's also plans about potential sites near New Delhi in Haryana, although the primary focus appears to be on states with port access for easier car exports.
A confirmed investment by Tesla would be a significant boost for Prime Minister Narendra Modi's administration, particularly as the country heads into a general election this month.
PM Modi had urged Tesla CEO Elon Musk to consider investing in India during their meeting in the United States last year, where Musk had expressed intentions of entering the Indian market "as soon as possible".
In an effort to promote manufacturing, especially in critical sectors like EVs, the Indian government has allocated substantial subsidies, anticipating investments from companies like Tesla.
Tesla is reportedly considering producing a smaller car model in the proposed factory, priced under $30,000, which could be sold in India and exported to south-east Asia, the Gulf, Africa, and southern and eastern Europe.
Tesla's potential investment in India is part of its broader global expansion strategy, which includes a new plant in Mexico scheduled for 2026.
The Indian factory, if realized, could involve initial investments of $2 billion to $3 billion, with additional billions of dollars of investments from suppliers, making it one of the largest foreign investments in India.
The company envisions the Indian plant reaching a production capacity of up to 500,000 cars annually, with potential plans for a battery plant akin to its "gigafactory" model in other locations.
This move comes amidst a global slowdown in EV sales growth, with China's BYD emerging as a significant competitor to Tesla.
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