Tesla resumes talks to build Gigafactory in India

Rumours of Tesla establishing a factory in India have been refreshed. According to local media, the talks about “Giga India” between Tesla and the government, which had stalled in the meantime, have been resumed. (UPDATE)

The Times of India cites government sources, saying Tesla has started negotiations with the Indian government to build a factory with an annual capacity of 500,000 electric cars.

“Tesla has come to us with an ambitious plan, and we are confident that the movement will be positive this time around,” one source said.

The Times reports Giga India could not only produce electric cars for the domestic market but that Tesla was considering using India as a base for exporting EVs in the Indo-Pacific region.

No concrete models are mentioned, but it will likely be the platform for cheaper Tesla cars due to its debut at Giga Mexico, currently under construction. The report posts a starting price of two million rupees, equivalent to 21,800 euros. Even with favourable production costs in India, that would probably not be easy to achieve with the Model 3 or Model Y. Even the China Model 3 with LFP cells costs 30,400 euros after the price cut in January.

Rumours of a possible Tesla factory in India first emerged at the end of 2020 and have had their run on the mill ever since. In 2021, Tesla’s plans to launch in India stalled after the Indian government refused to lower import duties for Tesla – India imposes up to 100 per cent import tax on electric vehicles, significantly weakening market opportunities for EV imports. India pushed Tesla to produce its cars locally, while Tesla initially wanted to import to test the strength of demand on the subcontinent. New momentum came into the matter in June this year when Elon Musk met with India’s Prime Minister Narendra Modi. As a result, Musk expressed confidence that Tesla would invest in India.

According to the report, the commerce and industry ministry is leading the talks, and the government hopes to get a “good deal” – but “while maintaining a level playing field”, the source said.

Neither the ministry, Tesla, nor Elon Musk himself would comment on the information when asked by the newspaper or Reuters.

Update 27 November 2023

Details are emerging about Tesla’s negotiations with the Indian government regarding the construction of a factory in the country. As Bloomberg writes, citing insiders, Tesla could initially import its electric cars into the country from next year and build a car factory in India within two years. Tesla is also considering manufacturing batteries in India in order to reduce costs. The states of Gujarat, Maharashtra and Tamil Nadu are being considered as potential locations for a Tesla plant.

However, according to the informants, an agreement is being finalized – but it has not yet been concluded and could still change. If an agreement is reached, Tesla could invest up to two billion dollars in the Indian plant.

indiatimes.com, reuters.com,  bnnbloomberg.ca (update)