Tesla to Explore Locations in India For $2bn-$3bn EV Plant

Tesla will send a team to explore locations in India for $2bn-$3bn EV Plant, the Financial Times reported on Wednesday, citing people familiar with the matter. The company reportedly plans to enter India at a time when EV demand is slowing in its main markets of the U.S. and China while competition there is heating up. This has been the main reason for a drop in Tesla’s report on its first-quarter deliveries.

The EV maker will focus on Indian states that have automotive hubs such as Maharashtra, Gujarat and Tamil Nadu, the report said. The step by India to lower import taxes on EV automakers that commit to invest at least $500 million and start domestic manufacturing within three years must have also encouraged Tesla to enter the Indian market.

Tesla has been trying to enter India for years but New Delhi wanted a commitment to local manufacturing. India's EV market is dominated by domestic carmaker Tata Motors. EVs made up about 2% of the total car sales in India in 2023, with the government targeting 30% by 2030. Tesla officials have been in communication with Indian government officials over the last year, with Musk meeting Prime Minister Narendra Modi in June.