Tesla’s much-anticipated official entry into the Indian market appears to be shifting to a higher gear, with recent reports from Business Standard (paywall) indicating that Tesla is now looking into establishing Gigafactory India. Business Standard points to Tesla exploring land options in Satara, Maharashtra.
Satara is about 250km (155 mi) from the Port of Mumbai, placing it in an excellent location to easily receive parts and materials from other countries, as well as ship completed vehicles elsewhere around the world. The potential facility is reportedly planned as a “Completely Knocked Down” or CKD assembly plant, which means that Tesla would import parts and then assemble them locally.
This is key to Tesla’s strategy in addressing India’s traditionally high import tariffs on fully built vehicles, which have been a major hurdle for Tesla in the past. This push aligns with India’s updated EV policy, which calls for reduced import duties on EVs priced at $35,000 USD or above for companies that commit to investing at least $500m USD in local manufacturing facilities between 2024 and 2027.
According to the report, Tesla is prepared to invest substantially more, with figures around $2-3 billion USD cited for a plant capable of doing final assembly on up to 500,000 vehicles. Tesla supposedly aims to roll out the first locally assembled vehicle from the facility no later than March 2026.
Building the Indian Foundation
Beyond just manufacturing plans, Tesla has been actively laying the groundwork for its future Indian operations. Tesla has reportedly finalized leases for its first showrooms in Mumbai and Delhi - two of the largest cities in India. An office space in Mumbai to headquarter Indian operations is also on that leasing list.
Tesla has also begun to hire its initial tranche of employees, with over 30 positions already posted. Tesla is also hiring Autopilot Vehicle Operators in several locations, indicating that Tesla intends to test at least the FSD suite in one of the most complex traffic situations around the world.
Elon Musk also confirmed that he plans to visit India and speak to the Indian Prime Minister, likely to broker a deal focusing on building out Tesla’s presence and bringing new technology to the country.
The road to India has not been without its complexities. Reports confirmed the resignation of Prashanth Menon, Tesla's India head, with oversight of Indian operations temporarily shifting to Tesla's China team. Furthermore, earlier discussions with potential joint venture partners, such as Hyderabad-based Megha Engineering for land acquisition, reportedly did not materialize, leading Tesla to explore other avenues and locations like Satara.
Despite all the setbacks, Tesla’s efforts indicate that they are more determined than ever to make a formal and official entry into the Indian market.
