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According to a news report Tesla has chosen Karnataka State in India as the location for the company’s next production facility. The report cites Karnataka state Chief Minister BS Yediyurappa who said in a statement “American firm Tesla will open its electric car manufacturing unit in Karnataka.”
On January 8, 2021, Tesla officially entered the Indian market by registering a subsidiary “Tesla India Motors and Energy Private Limited”. Tesla’s Indian arm was incorporated in Bengaluru which is the capital city of Karnataka state. The company is also setting up a research and development center in the city.
The announcement from the Chief Minister is the first time it has been confirmed Tesla will be building a manufacturing plant in India. However, there are several indications that the location of the factory will be in Karnataka state. Elon Musk on multiple occasions has said he wants to research and development centers to be close to production facilities. This is meant to have a short feedback loop between the two and for Tesla to have rapid iterations of production plant design.
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As of now, it is not yet clear when Tesla will kick off work on the factory and how big and what products will come first. However, rumors suggest Tesla is looking to produce Model 3 initially.
The timeline is equally unclear. In the past, Tesla after choosing a location for a gigafactory began work on the plant almost immediately. However, there are a couple of things that are different when it comes to the Indian plant.
First, the announcement comes from the Karnataka state government and hasn’t been confirmed by Tesla. Tesla usually announces new production facilities with the company’s quarterly earnings report. And since the Q4 2020 earnings report was just a week ago we might have to wait 3 more months for Tesla to confirm the news.
And two, Tesla, when it started building production facilities in China and Germany the company already had years of operations in the countries. However, Tesla hasn’t sold a single vehicle in India as of now and the company only entered the subcontinent only a month ago.
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Despite Tesla vehicles not officially sold in the Indian market, there are still several enthusiasts who imported the vehicles from other countries. However, Tesla’s absence in India means owners of Tesla vehicles in the country haven’t had access to even the most basic Tesla’s service and repair shops. However, several fans of the electric car brand have been trying to lure Elon Musk to begin sales and open a service center in the country.
Next year for sure— Elon Musk (@elonmusk) October 2, 2020
The saga of Tesla entering the Indian market has been going on for a few years now. Back in 2016, Elon Musk on multiple occasions had said Tesla was going to launch in the country. Following his statement, Jay Vijayan, who was then Tesla’s Chief Information Officer visited the country.
But the uptick of enthusiasm was brought down soon after. Following the visit by Vijayan, Elon Musk said Tesla might not be allowed to sell in India. The reason was regulations that forced car companies to source 30% of parts locally.
In response, India’s Ministry of Commerce and Industry said the company does not need to have locally made parts. However, the ministry also seemed to suggest Tesla will be allowed to sell its cars only if the company manufactures the vehicles in the country.
Following there have been constant reports suggesting the company will enter the country. But, this time it seems the dream has become real. Even if Tesla will only be allowed to sell cars in the country the company opening a research and development center in the country with the statement from Chief Minister BS Yediyurappa makes it all but confirmed.
Tesla usually sets up research centers in countries it has manufacturing facilities. In the past couple of years, the company has announced research centers in China, Germany, and Austin Texas. All locations have a new Giga factory site now. So if there is a research center opening it is a strong indicator Tesla will be building a Gigafactory soon.
And given the size of the population (over 1.3 billion people) and the growing economy, (the fifth largest in the world), it seems like India is a market Tesla can’t avoid. Especially given Tesla’s updated plans to sell 20 million cars a year by 2030.
The country is known for having a large market for inexpensive small cars, the upcoming 25,000 dollars “Model 2” will be a perfect fit. But, India also has a growing luxury car market, and the company’s Model S and X might find a good market there.
In addition to its cars, Tesla can also get a huge market for its stationary storage batteries and solar offerings. The country is expanding its renewable energy sources at a staggering speed. With already 35% of the energy supplied by renewable sources. And as this trend continues, the need for battery storage is only going to grow.
So what do you think? Are you excited that Tesla will finally be building a production plant in India? Do you think Tesla will finish the plant in a smaller time than Giga Shanghai and Giga Berlin? Let me know your thoughts down in the comments below.
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Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at
@TinsaeAregay for daily Tesla news.
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