Tesla to set up electric vehicle manufacturing plant in India

Tesla Inc. will set up an electric-car manufacturing plant in India for the first time. The plant will be located in the southern Indian state of Karnataka, the state’s chief minister said over the weekend. India will become the third nation in the world that Tesla set up electric vehicles (EVs) manufacturing plants after the US and China.

The US firm Tesla will be opening an electric car manufacturing unit in Karnataka

The American automaker has been negotiating with local officials for six months and is actively considering car assembly in the suburbs of Bangalore, people familiar with the matter said.

The electric car maker incorporated Tesla Motors India and Energy Private Limited last month with the city of Bengaluru’s registering office in Karnataka. Bengaluru also known as Bangalore is a hub for global technology companies like Accenture, IBM, Oracle, Cognizant etc.

Tesla’s chief executive, billionaire Elon Musk had hinted on on Twitter late last year about Tesla’s impending launch in India in 2021.

Although Tesla Inc. has not yet released an official statement on the finer details of the agreement with Indian officials, it is likely that Tesla will have a Gigafactory in India similar to the one they set up in China.

Electric vehicles uptake in India

India’s electric vehicle penetration is less than 1%, even though there is a growing appetite for electric vehicles in the nation. The country’s not-so-import friendly laws, makes it harder to bring in electric vehicles as the government wants to promote local manufacturing capacity. India’s vast IT labour force and a huge appetite for electric vehicles makes the market viable to set up a plant in the country.

Despite India’s vast potential, charging infrastructure remains another impediment to large-scale EV adoption. To make EVs viable in India Tesla would have to work with partners in India to develop a charging network similar to the one established in the US.

India is looking to reduce its dependence on oil and cut down on pollution, but its efforts to promote electric vehicles have been stymied by a lack of investment in manufacturing and infrastructure such as charging stations. To boost investment, India plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities.