The Financial Times is reporting that Tesla will send a team to India later this month to explore possible locations for a new factory that’s slated to produced the company’s much anticipated low-cost model.
According the Financial Times, a deal may have been struck between the Indian government and Tesla after New Delhi last month lowered tariffs on higher-priced imported EVs for companies that commit to making them in the country within three years.
This is something that Tesla has been lobbying for as a precondition for investing in the country. Insiders say Tesla is likely to spend $US2-$US3 billion on the new EV factory.
Tesla CEO Elon Musk met with Prime Minister Narendra Modi in New York in June last year where he said it was “quite likely” that Tesla would build a factory in India.
“He really cares about India because he’s pushing us to make significant investments in India, which is something that we intend to do,” Musk told reporters after the June 2023 meeting.
Elon Musk: “I’m Incredibly excited about the future of India; He (Modi) really cares about India because he’s pushing us to make significant investments in India, which is something we intend to do; It was a fantastic meeting.” @elonmusk pic.twitter.com/WLd68GQs0z
— Sawyer Merritt (@SawyerMerritt) June 21, 2023
According to Financial Times Tesla’s team will focus on states with existing automotive hubs, including Maharashtra and Gujarat in the west and Tamil Nadu in the south.
“Some automakers have plants in Haryana state, neighbouring New Delhi, and one of the people said they thought Tesla might also scout potential sites around the capital,” the FT says.
“However, the second person said the focus of Elon Musk’s company would be on the other three states because they had ports, making it easier to export cars.”
Tesla’s low-cost model may give company the boost it needs
Originally announced at its investor day in March 2023, Tesla’s next generation model will use a revolutionary new manufacturing process which Tesla claims will reduce production costs to below $US20,000 paving the way for a much cheaper, mass produced model for the EV giant.
The news of a possible new factory in India to produce the next generation model comes after Tesla reported lower than expected sales in the first quarter of 2024, marking the company’s first year-on-year drop in quarterly sales since 2012.
Daniel Bleakley is a clean technology researcher and advocate with a background in engineering and business. He has a strong interest in electric vehicles, renewable energy, manufacturing and public policy.