Tesla is considering Maharashtra, Tamil Nadu, and Gujarat for its new manufacturing unit in India. However, talks of Tesla’s investment plans in India might be on hold. The final decision will depend on Tesla’s product strategy and local partnerships.
If Tesla focuses on a low-cost model for the Indian market, Maharashtra could be the chosen location. If exporting vehicles is the goal, Tamil Nadu might be selected due to its strong automotive ecosystem and port access. Gujarat is also an option if it offers significant subsidies to reduce logistics costs.
Tesla has held several discussions to find a local partner, with Pune being a potential site for the factory. Maharashtra’s proximity to key markets like Mumbai and NCR makes it attractive for domestic sales. Tamil Nadu’s infrastructure and port facilities support export strategies.
Despite these plans, Tesla’s India project has faced delays. Reports suggest that Elon Musk’s team has not continued talks with Indian officials since Musk postponed his India visit in late April. The delay is due to Tesla’s internal capital issues and a strategic review of its Indian investments.
Globally, Tesla’s performance has been under pressure, with deliveries dropping for the second quarter in June due to competition in China and low demand for its current models. The new Cybertruck also had a lukewarm response. Competitor VinFast has already chosen Tamil Nadu for its operations, benefiting from faster import and export processes.
The Indian government is encouraging such investments by lowering taxes on imported electric vehicles to 15% for cars priced at $35,000 or above, if companies invest $500 million and set up a manufacturing plant within three years.
