With Elon Musk’s recent tweets promising Tesla in India next year, and the setup of a Tesla India online configurator by January 2021, many questions have been raised as to where Tesla India will get its electric cars from: Will they be imported, locally assembled, and would Gigafactory Shanghai supply?
According to a report on CNBC, Tesla could first kick-off Indian operations with imported units, but will follow up with a local manufacturing plant. According to Dan Ives, the managing director at Wedbush Securities, who spoke to the publication, even two Tesla India manufacturing plants could be a reality by 2023.
Earlier this week in an earnings call, Elon Musk said the company spent over USD 1 billion (INR 7,300 Cr) in the past quarter on new factories in Austin, Texas and Brandenburg, Germany, and a “good goal” would be to make 20 million Teslas by 2030. This would result in replacing 1 per cent of the global fleet per year.
These global aspirations cannot be realized without India, which one analyst says could represent 10 per cent of Tesla’s demand in the next 5 years. To its credit, the Indian government has enticed global manufacturers to setup manufacturing hubs in the country. NITI Aayog, India’s federal think tank chaired by PM Modi, shared a USD 4.6 billion (INR 33,580 Cr) incentive plan for companies to setup advanced battery manufacturing facilities, whereas the FAME II (Faster Adoption and Manufacturing of Electric Vehicles) program allocated INR 10,000 Cr nearly to accelerate EV adoption.
The FAME II program wants to setup 2,700 charging stations across the country (ensuring there is one charging station at least in a 3×3 km grid), and approvals have already been grated for 1,050 stations by 22 government and public sector entities in 65 cities. These development plans come in addition to GST being cut to 5 per cent on electric vehicles, income tax relief on interest paid towards a vehicle loan on an EV and generous state government subsidies and benefits on electric vehicles.
According to another analyst, Tesla is in the process of selecting a site for manufacturing in India, and could break ground by summer 2021. By end of 2021, this analyst expects Tesla India’s first production facility to replicate the Gigafactory Shanghai model, and by 2023, there could be two Tesla factories in India. Tesla’s Gigafactory Shanghai was setup in a record 6 months time, so the company has the know-how to expedite a local manufacturing hub, if it wishes to.