June 21, 2023: Tesla CEO Elon Musk has hinted that the company’s next Gigafactory location will likely be announced by the end of this year. While there have been rumors and speculations about possible locations such as Spain, France, Canada, Indonesia, and South Korea, all signs are increasingly pointing toward India. Tesla has been considering establishing a factory in India for several years, and various factors indicate a strong possibility of it becoming a reality.
The interest in India started back in 2015 when Indian Prime Minister Narendra Modi and Elon Musk had their first meeting at Tesla’s Fremont Factory in California. At that time, Tesla was still a relatively small company, producing only a few thousand units per year and primarily offering the Model S and Model X. Electric vehicles were not as popular as today, and gasoline-powered cars dominated the market.
Fast forward to 2018, when Tesla moved significantly by opening its first vehicle production factory outside the United States in Shanghai, China. The Chinese factory quickly became Tesla’s most efficient production plant, employing thousands of workers and serving as an export hub for European markets.
After establishing factories in Shanghai and Berlin in 2019 and 2023, respectively, Tesla seemed ready to invest substantially in India in 2021. The company assembled a team of executives for the Indian market, including experienced individuals from Tesla and other prominent automakers. However, challenges emerged due to India’s high import duties on vehicles. Tesla requested a reduction in import duties to 40% to gauge demand for its cars, but the Indian government was reluctant to provide company-specific duty rollbacks.
India has a manufacturing initiative, “Make In India,” which aims to attract substantial investments and encourage companies to produce and assemble products within the country. Government officials emphasized the importance of investing in local manufacturing and hesitated to roll back import duties for Tesla without a commitment to building a factory in India.
After two years of negotiations, Tesla and India have reached an agreement. While the details of the partnership and investment are unknown, Prime Minister Modi and Elon Musk have expressed confidence in Tesla’s presence in India. Musk stated that he hopes for a significant investment and relationship with India, indicating that an announcement may come soon.
Although speculation about Tesla’s following factory location continues, considering the intentions of both Tesla and the Indian government, the longstanding efforts and recent statements suggest that India is the most likely destination.