Tesla’s Search for Factory Site in India Leads to Andhra Pradesh
Tesla’s Ongoing Search for Manufacturing Site: Elon Musk’s Tesla is actively scouting for a location to establish a completely knocked-down (CKD) assembly unit in India.
- Despite opposition from US President Donald Trump regarding high import tariffs, Tesla continues to explore options in India.
- Recently, Andhra Pradesh emerged as a leading contender, offering pre-acquired land at three possible locations: Nellore, Sri City, and Anantapur.
Other Potential Locations: Previously, Maharashtra and Gujarat were under consideration for Tesla’s plant.
- However, Tesla appears hesitant due to the complexities of land acquisition and rehabilitation.
- Tamil Nadu also remains a possibility, with the state boasting a well-established automotive ecosystem home to global manufacturers like Hyundai, BMW, and Ford.
Importance of Andhra Pradesh in Tesla’s Plans: If Chief Minister Nara Chandrababu Naidu successfully attracts Tesla to Andhra Pradesh, it would be a significant achievement, reminiscent of his role in bringing Microsoft to the state in the 1990s.
- Nara Lokesh, Andhra Pradesh’s IT Minister, initiated the discussions by visiting Tesla’s headquarters in Austin, Texas.
- The proposed locations, such as Anantapur, are seen as ideal for electric vehicle (EV) and battery production.
Strategic Advantages of Andhra Pradesh’s Locations:
- Sri City is situated just 80 km from Chennai Port, providing easy access to both the Chennai and Karnataka markets.
- Anantapur’s proximity to key customer bases in South India, which has the highest demand for luxury EVs, adds to its appeal.
- Andhra Pradesh’s Economic Development Board has also been instrumental in showcasing the state’s large parcels of land.
Maharashtra’s Role and Trump’s Concerns:
- Tesla has also visited Maharashtra and inspected locations near Chakan, an automotive hub close to Pune.
- P Velrasu, CEO of Maharashtra Industrial Development Corporation (MIDC), welcomed the potential for new technology-driven companies but acknowledged Tesla’s challenges with the high import duties.
- Trump’s criticism of India’s high import tariffs on cars has raised concerns, as the effective tariff on fully built EVs is close to 110%, making it difficult for companies like Tesla to sell in India.
Tesla’s Investment Plans in India:
- If Tesla moves forward with local manufacturing, it plans to invest between $2-3 billion.
- Tesla is also considering launching a low-cost car specifically designed for the Indian market, where it already sources $1-2 billion in auto parts annually.
- The Model 3 remains Tesla’s most affordable option, priced at approximately $29,990.
