Tesla's Next Stop? Tamil Nadu Pitches For Elon Musk's New EV Factory In India

Tesla CEO Elon Musk is slated to visit India late April amid speculation surrounding the US firm’s anticipated investments in India

Elon Musk during his India visit will meet Prime Minister Narendra Modi.

Source : Getty

Tamil Nadu is aggressively positioning itself as a prime destination for Tesla Inc.'s manufacturing hub, as reported by news agency Bloomberg. Tesla CEO Elon Musk is slated to visit India late April amid speculation surrounding the US firm’s anticipated investments in India. "Tamil Nadu will be vying for every opportunity in electric vehicle (EV) manufacturing from global automotive giants," stated T R B Rajaa, the state's Minister for Industries, affirming the region's aspiration to attract Tesla.

Calling Tamil Nadu's as the ‘Detroit of India’ due to its significant presence in the automotive sector, Rajaa touted the state's leading electric vehicle policies and ecosystem. "Tamil Nadu is already the automotive capital of the country," said Rajaa, expressing the state's ambition to extend its dominance into electric vehicles. "Now, we aim to establish the state as the electric vehicle capital as well."

Musk during his India visit will meet Prime Minister Narendra Modi, who is seeking re-election for a third term in the upcoming Lok Sabha elections. Securing investment from the electric vehicle giant would not only enhance Modi's economic credentials but also underscore the state's reputation for being conducive to business and job creation.

Chennai is actively courting Tesla's interest, leveraging its existing automotive manufacturing infrastructure, which hosts facilities for major players such as Nissan Motor Co., Renault SA, Hyundai Motor Co., and BMW AG, along with their associated supply chains. However, Tamil Nadu faces formidable competition from other states also vying for Musk's attention.

While Tesla has contemplated establishing an EV plant in India, no definitive commitment has been made yet. As the world's third-largest emitter of greenhouse gases, India aims to decarbonise its economy and achieve net-zero emissions by 2070, presenting an opportunity for Tesla to expand its market presence. With demand for EVs steadily increasing in India, the country offers potential growth prospects for Tesla, especially amid plateauing sales in China and the US.

India, in a bid to incentivise local production, recently reduced import duties on EVs and mandated that foreign firms investing a minimum of Rs 4,150 crore and starting local production within three years would be eligible for tax concessions.