Tesla Plans to Venture into India for Its Next Multi-Billion Dollar Factory

Tesla remains unfazed by concerns over demand despite lower-than-expected Q1 2024 delivery figures. Instead, reports indicate the company's interest in expanding its footprint globally, particularly eyeing India as a potential location for its next electric vehicle factory, with estimated investments ranging from $2 billion to $3 billion.

Exploring options in states like Maharashtra, Gujarat, and Tamil Nadu, known for their robust automotive infrastructure, Tesla's move aligns with Prime Minister Narendra Modi's initiative to bolster domestic manufacturing, as per CNBC and FT reports.

India's recent reduction in import tariffs on select EVs for manufacturers committing to invest at least $500 million and initiate local production within three years further underscores the country's push to become a manufacturing hub for advanced electric vehicles. This effort gained momentum following Modi's meeting with Tesla CEO Elon Musk in June, where Musk was encouraged to explore investment opportunities in India's EV sector.

India's strategy to boost domestic production mirrors its approval of a production-linked incentive scheme for automobiles and auto components in 2021, backed by a $3.1 billion budget over five years. Extended starting January 1, this scheme aims to enhance domestic manufacturing capabilities and reduce import dependency.

Analyst Ashwin Amberkar from Canalys highlighted Tesla's attractiveness in India due to its global expansion appetite and capability to develop EV production ecosystems, especially with increasing incentives offered by India's new EV policy.

Despite a sluggish start to the week with shares slumping after Q1 delivery figures fell far below estimates, marking Tesla's first annual Q1 delivery decline since 2020, the company remains undeterred in its ambitious plans for expansion and investment.