Tesla Ready to Build Factory in India

After months of hints of a possible entry into the India market for Tesla, Indian officials now say that plans to build a factory in Karnataka, India, have been confirmed. Tesla has not yet officially commented on the news, possibly due to its current lack of a Public Relations team.

However, Elon Musk has previously indicated that Tesla could establish a presence in India as early as this year. Some Indians have avidly watched Tesla’s international developments in the hope that it would come to their country. Musk had this exchange with one fan club in early October 2020:

Previously, import fees have proven to be a major obstacle because they can be as high as the original price of a typical Tesla vehicle. That may have priced many Indian residents who might otherwise be interested in buying an electric vehicle out of the market.

Tesla has been in talks with Indian officials and Elon Musk even gave Indian Prime Minister Narendra Modi a tour of the Gigafactory in California in 2015. During the discussions, Musk brought up obstacles that included the import fees, regulations, and Indian electrical infrastructure that may not be able to support a large number of electric vehicles.

India may have been increasingly eager to have a factory established in the state of Karnataka, as the California factory provides tens of thousands of jobs for California residents. It may also be watching the worldwide wave of concern about fossil fuel-dependent vehicles and their impact on the environment.

The U.S. states of California and Massachusetts both have plans to ban the sale of new gasoline-powered cars by 2035. Several countries across North America, Europe, and Asia also have plans to phase out sales of gasoline vehicles. India may be interested in not being left behind by the trend.

India is currently working on improving residents’ access to electric power, including making upgrades to its power grids and retrofitting homes for access to electric power. It has also expressed interest in diversifying its power supply, including investment in renewable energy sources. This will be critical to the widespread adoption of electric vehicles in India.

“We all accept that the future is electric, it is now time to embrace electrification as an opportunity to create a self-reliant and cleaner India,” Avendus, an Indian financial services firm, said in a July 2020 statement.

Karnataka Chief Minister Bookanakere Siddalingappa Yediyurappa broke the news of the planned factory in comments made to Bloomberg.