Tesla, the leading electric vehicle manufacturer led by Elon Musk, is gearing up to enter the Indian market and has taken a crucial step towards setting up a production plant in the country. The company has leased a 5,850 sq ft office space in Pune for five years from Tablespace Technologies, a deal that was facilitated by real estate analytics firm CRE Matrix.
The office space will cost the car company Rs 11.65 lakh per month, with a security deposit of Rs 34.95 lakh for the lease period. The agreement also includes parking spaces for five cars and ten bikes, reflecting the company’s vision of promoting sustainable transportation options in India.
Tesla has rented office space in Pune amid rumours of a recent meeting between two senior Tesla executives and India’s Commerce Minister, Piyush Goyal, in New Delhi. During the meeting, the official and the minister reportedly discussed Tesla’s intention to set up a factory in India.
The factory will reportedly produce low-cost electric vehicles priced at $24,000, which is approximately 25% cheaper than Tesla’s current entry model. The plan involves targeting both the domestic and export markets. Tesla could also use this manufacturing facility in future to supply vehicles to other countries in South Asia and south-east Asia.
Tesla met with Piyush Goyal to discuss the idea of creating a supply chain for electric vehicles in India which could speed up Tesla’s entry into the Indian market. India is a big automobile market, and Tesla sees an opportunity to benefit from the increasing interest in electric vehicles. The Indian government is also supportive of the electric vehicle industry, providing incentives and subsidies to encourage its growth.
Meanwhile, Tesla’s Chinese rivals are facing several hurdles and challenges in their attempts to invest in India. Recently, the central government rejected a $1 billion investment proposal from Chinese EV maker BYD, citing stricter approval requirements after the Indo-China border dispute in 20204. This was not an isolated case, as another Chinese automaker Great Wall Motors had also seen its $1 billion investment plan for EV manufacturing in India cancelled.
In addition to facing investment barriers, BYD is now under investigation for allegedly evading taxes by up to $9 million related to its operations in India. The company’s Sriperumbudur plant near Chennai is being probed by India’s Directorate of Revenue Intelligence for underpaying taxes.
In contrast, Elon Musk has shown enthusiasm for investing significantly in India, as he praised Prime Minister Modi’s commitment to the country’s growth. After their meeting, Musk acknowledged Modi’s dedication to India, indicating Tesla’s intention to make substantial investments in the country.
With Tesla making steady progress towards establishing a manufacturing presence in India, the company is poised to capitalize on the nation’s burgeoning interest in electric mobility. As it ventures into this promising market, Tesla’s entry comes at a time when its Chinese competitors are facing increased difficulties, further strengthening the company’s prospects in India’s dynamic automobile industry.
