Will India be the site of Tesla’s next Gigafactory?
Media reports on the EV industry tend to focus on the US, Europe and China. However, there’s a tremendous amount of EV-related activity going on in India these days. Giant automakers Mahindra and Tata have been selling EVs for years, and a growing number of startups are also vying for a piece of the electric action. The federal government has implemented a number of incentive plans for automakers, buyers and charging infrastructure, funded with lakhs of rupees and tagged with acronyms every bit as clever as those used in the West, from the 2012 National Electric Mobility Mission Plan to Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) to the Go Electric campaign launched at the start of 2021.
None of this is news to Tesla, which incorporated a new unit, Tesla Motors India, earlier this year. According to a number of sources, Tesla has also reportedly beefed up hiring for top positions in India and zeroed in on a location for its first retail store in the country. The California carmaker is believed to be planning a manufacturing facility in the state of Karnataka, a hub for global technology companies. Elon Musk has tweeted several times about Tesla’s plans to expand to India, and last December, he confirmed that launch is planned for 2021. We’ve heard no details since, but “sources familiar with the matter” told CNBC that Tesla’s first move will be to bring imported Model 3s to the Indian market.
In March, India’s Transport Minister Nitin Gadkari, a long-time supporter of EVs, sweetened the pot with an offer of incentives for Tesla to set up manufacturing in India, and a promise of low production costs. “Rather than assembling [cars] in India they should make the entire product in the country by hiring local vendors. Then we can give higher concessions,” Gadkari said in an interview. “The government will make sure the production cost for Tesla will be the lowest when compared with the world, even China, when they start manufacturing their cars in India. We will assure that.”
Now Gadkari has expanded on his pitch—at a recent industry conference, he detailed some of the reasons India would be a good place for Tesla to do business.
“I will suggest [to Tesla] that it will be a golden opportunity for them to start a manufacturing facility in India because as the automobile components are concerned, already Tesla is taking a lot of components from Indian manufacturers, so there will be availability,” the Minister said.
He also added a note of urgency, saying that he believed Indian companies would be producing EVs to rival Tesla soon. “Within two years, whatever the e-vehicles we are getting into the market from Indian companies, they will be up to the mark of Tesla. So in the interest of Tesla, I suggest that [they] start manufacturing as early as possible.”
Gadkari envisions India as a major producer of EVs, and he wants to see Tesla building vehicles in the country. “Within five years India will be [the] number-one manufacturing hub for electric vehicles in the world. If Tesla manufactures here in India, we will support them. They can export a lot of vehicles from India, and compared with other countries, it will be economically viable.”