Tesla is making significant strides towards establishing its presence in India, as reports indicate the electric vehicle (EV) giant is actively exploring potential sites for a new factory in the country. The proposed facility is poised to benefit from a substantial investment of up to US$3 billion (A$4.57 billion), underscoring Tesla’s commitment to expanding its manufacturing footprint.
According to insights from the Financial Times, Tesla is set to dispatch a team to India by the end of the month to conduct a thorough assessment of potential locations for its EV factory. Sources familiar with the matter revealed that Tesla is prepared to allocate between US$2 billion and US$3 billion (A$3.05bn to A$4.57bn) towards the construction of the forthcoming plant.
The impetus for Tesla’s venture into the Indian market gained momentum following CEO Elon Musk’s meeting with Prime Minister Narendra Modi in June 2023. Musk’s assurance during the meeting that Tesla would expedite its entry into India further solidified the company’s intentions. Subsequent reports indicated Tesla’s engagement with India’s commerce minister, signaling its proactive approach towards establishing a manufacturing presence in the country.
Initial plans for the Indian factory suggested it would manufacture a new entry-level EV tailored for the local market, potentially positioned below Tesla’s Model 3 sedan and Model Y SUV. While Musk has outlined production timelines for the new model in Texas and Mexico, with India being a potential production hub in the future, the specifics remain open-ended.
Sources cited by The Financial Times project that the Indian factory could achieve an annual production capacity of up to 500,000 vehicles. This ambitious target aligns with Tesla’s global manufacturing aspirations, as evidenced by its production output from facilities in the US, Berlin, and Shanghai.
In addition to the EV factory, discussions have surfaced regarding the potential establishment of a battery plant adjacent to the proposed facility. However, plans for the battery-focused facility are still in nascent stages compared to the advancements made in securing the EV manufacturing site.
India’s position as the world’s third-largest new car market underscores its significance in Tesla’s global expansion strategy. Despite the country’s burgeoning EV market, which witnessed a notable increase in sales in 2023, Tesla aims to leverage its expertise and innovation to drive further growth and accessibility in the Indian Automotive Industry.
As Tesla accelerates its global production capabilities, with vehicles currently sourced from its Shanghai factory for the Australian market, the establishment of a state-of-the-art EV factory in India marks a pivotal step towards realizing its vision of sustainable mobility on a global scale.