Tesla Inc. is closing in on an agreement to make electric vehicles in India for the first time, opening up a new growth opportunity after founder Elon Musk set up production in the U.S. and China.
Tesla has picked Karnataka, a southern state whose capital is Bangalore, for its first plant, the state’s chief minister said over the weekend. The automaker has been negotiating with local officials for six months and is actively considering car assembly in the suburbs of Bangalore, people familiar with the matter said.
Tesla didn’t immediately respond to requests for comment and did not confirm the minister’s statement.
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The company is conducting due diligence for office real estate in the region and plans to set up an R&D facility, said the people, asking not to be named because the matter is private. Tesla has focused on Bangalore because it’s shaping up to be a hub for electric vehicles and aerospace manufacturing talent, they said. Tesla has incorporated its Indian unit and registered offices in downtown Bangalore.
Musk all but confirmed Tesla would enter India in January after months of speculation. The world’s richest man on Jan. 13 tweeted “as promised” in response to a report on a Tesla-focused blog that the automaker was in talks with several Indian states to open an office, showrooms, a research and development center — and possibly a factory.
That revelation sparked euphoria from locals, such as Nikhil Chaudhary, a 20-year-old student at the University of Delhi who helped start India’s Tesla fan club in 2019.
Despite the hype, Tesla’s foray into India may well prove challenging. The country hasn’t yet rolled out the welcome mat for EVs like neighbor China, where Tesla set up its first factory outside of the U.S. and now dominates sales of premium EVs.
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