Tesla India R&D centre in Bengaluru being secretly planned

Some new evidence has surfaced about the arrival of Tesla in India in one form or another. The company is reportedly considering to set up an R&D centre in Bengaluru.

Tesla held a meeting with Karnataka government on 10 September 2020, as per a new report from The Economic Times. The state government is seeking an investment from the world’s no.1 electric car company. Tesla has shown interest in setting up a research and innovation centre in the Indian Silicon Valley, and a followup meeting may take place by next week. In addition to automobile, the company’s business is in renewable energy solutions as well, and so, it’s probably too early to hype-up the Tesla India R&D centre establishment report.

Tesla Narendra Modi Elon Musk meet 2015
Narendra Modi’s visit to a Tesla facility and meeting with Elon Musk in 2015 confirmed the interest of both parties to have Tesla in India.

Just because an automaker sets up an R&D centre in a country doesn’t mean it will sell cars as well. However in the case of Tesla, the company has evinced interest already to sell its model lines here if something is done about the punitive import tariffs. So, sooner or later, the Tesla Bengaluru R&D centre establishment would be followed by the launch of Tesla electric cars in India.

The highest hopes for Tesla India establishment previously were in September 2015 when Prime Minister Narendra Modi visited the Tesla facility in California, USA and met its founder & CEO, Elon Musk. Tesla was even taking pre-orders from India for the Model 3 in 2016 then. However, now with 2020 nearing an end, high taxes as part of the various protectionist measures in India have kept the company at bay. Musk has time and again expressed interest in entering our market on Twitter.

At the time when Modi visited a Tesla facility in 2015, the company was scouting the location for its first automobile manufacturing plant outside America. China was among the top candidates, but Modi’s visit had raised hopes of a different plan. However, a Tesla India plant didn’t happen and a Tesla Gigafactory was finalised in Shanghai, China in 2018. That facility is up and running now, and the second overseas plant was announced in Berlin, Germany in 2019 which starts production late next year.

Tesla’s auto line-up now includes Model S and Model 3 sedans, Model X and Model Y SUVs, Cybertruck pickup truck, Mk2 Roadster sports car and Semi semi-truck. The Cybertruck and Semi go on sale in 2021, and the Mk2 Roadster is expected in 2022.

Some countries are welcoming Tesla with arms wide open, motivating the company to set shop there. China, infamous for its trade barriers for foreign companies, made an exception for Tesla and allowed the company to have a 100% ownership in its Shanghai plant. Otherwise, foreign automakers are required to have a joint venture in their Chinese factories. German chancellor Angela Merkel has promised the company that Germany will provide every assistance it needs for the Gigafactory Berlin.

Manufacturing of Tesla in India is essential if the company wants to have a meaningful presence in the country. Localisation is the way to reach numbers, and Musk sure knows that. The company may look at a local assembly right before its entry in our market, if that ever happens. Until then, interested business moguls and celebrities, like Reliance Industries Limited’s Mukesh Ambani and Essar Group’s Prashant Ruia, would privately import their Teslas.