NEW DELHI (CU)_American electric carmaker Tesla, Inc. is closing in on an agreement to set up a manufacturing plant in India for the first time, in order to produce electric vehicles in the South Asian country.
The company has chosen the state of Karnataka, in southwest India, for its first plant, the state’s chief minister revealed. People familiar with the matter say that the carmaker has been negotiating with state and federal officials for six months, and is considering car assembly in the suburbs of Bangalore, as the city is shaping up to be a hub for electric vehicles and aerospace manufacturing talent.
These sources, who have requested to remain anonymous since the matter is private, have also revealed that the carmaker intends to set up an R&D facility, in the city, and is conducting due diligence for office real estate in the region.
Meanwhile, Tesla CEO Elon Musk pretty much confirmed the news by tweeting “as promised” in response to a report on the firm’s intention to set up stores, an office, an R&D centre, and possibly a factory for production in India.
Despite the hype sparked in the South Asian country over the revelation, Tesla’s entry to India may well prove challenging.
Unlike Neighbouring China, where Tesla has set up its first factory outside of the US, India however, hasn’t yet rolled out the welcome mat for EVs. According to BloombergNEF, EVs account for about 5 per cent of China’s annual car sales, in comparison to less than 1 per cent in India.
Moreover, charging infrastructure remains another impediment to large-scale EV adoption in India. Chinese carmakers continue to roll out competitive EV models and develop a diverse ecosystem, and according to the International Energy Agency, around 60 per cent of the world’s public slow- and fast-charging spots are in the East Asian country.
Although India has been making similar moves to disrupt the global auto industry landscape, however, it is not yet on the same scale.
