The American electric vehicle giant Tesla Inc., led by CEO Elon Musk, has frequently hinted at its ambition to break into the burgeoning Indian automotive market, with a potential launch as early as next year. But this brings us to the question of which state may be suitable for Tesla to start production.
The Indian government is mulling over a new electric vehicle policy to reduce import taxes for automakers willing to commit to some degree of local production. This move could enable Tesla and other international EV players to initially test their products in the Indian market with lower financial risk, under the condition that they later initiate local manufacturing, source components domestically, and provide assurances against any lapses in their commitments.
Initially, Tesla may opt to introduce Completely Built-Up (CBU) imports in India to assess consumer interest and gather specific data on the performance of their EVs under Indian environmental and road conditions. This strategy would serve as a stepping stone towards Tesla’s ultimate goal of establishing a manufacturing facility in India, thereby offering locally produced, affordable electric vehicles.
Regarding potential locations for this manufacturing plant, Tamil Nadu, Maharashtra, Haryana, and Gujarat emerge as strong contenders, key automobile manufacturing hubs. Uttar Pradesh and Karnataka are also actively vying for investment, placing them in the fray. Proximity to sea ports often influences carmakers’ plant locations, possibly giving Tamil Nadu, Maharashtra, and Gujarat an advantage.
However, numerous auto component suppliers for EVs in Gujarat and Tamil Nadu give these states a slight edge over others, suggesting that one of them might host Tesla’s Indian factory.
While there has been no official confirmation regarding the location or investment specifics for the factory, the upcoming months and years are poised to be a fascinating period for observing Tesla’s journey in India.