India Gets Tesla Facility
Tesla and India have finally decided to get serious.
On August 2nd, Indian media outlet PunekarNews reported that the EV company and the local government had reached a point in their ongoing negotiations that Tesla pulled the trigger on the lease of a 5,850-square-foot office.
The new location at the Panchshil Business Park in Pune is definitely not for production - but the local area is a bit of a hotspot for IT and automotive industry, so it definitely seems like the right place to set up a headquarters.
Tesla and India have been going back and forth about a potential partnership for a couple of years at this point - but we’ve never seen this sort of commitment. In the past, Tesla has hit the proverbial wall in terms of dealing with India’s notoriously tough tariffs on foreign companies - but this most recent push into the Indian market has shown a much more willing Indian government - with officials as high up as Prime Minister Modi taking an interest in the deal.
Not only that, but every bit of reporting we’ve had about this year’s attempts to get a partnership going between India and Tesla have shown that Indian officials seem much more enthusiastic.
Reuters reports that just last week, India’s Commerce Minister Piyush Goyal met with Tesla executives to discuss a manufacturing plant, days before they finalised the deal for Tesla’s new office space.
And it all comes down to one detail: Tesla’s plans for a new $24,000 USD model of car.
During this year’s Investor Day event in March, Tesla presenters revealed that the company was making preparations to launch a truly affordable small vehicle. The thinking at the time was this could be the fabled compact “Model 2” - a vehicle smaller than the Model 3, priced for roughly $24,000 dollars that CEO Elon Musk had hinted at years ago.
It was also heavily implied at Investor Day that the newly announced GigaMexico would likely be the first location to produce these vehicles en masse.
However, Mexico certainly wouldn’t be the only place a smaller electric car would sell. Tesla has had a relatively rough time in China - most of their strongest rivals are well-established there. But a compact vehicle would certainly go a long way to allow the company to compete in not just China - but throughout Asia.
And so we look back to India - a country that has been on Tesla’s shortlist for a new facility for some time now. India is becoming very popular for automotive companies wanting to expand across Asia, as their high population and lack of competition makes for a very enticing opportunity.
Tesla specifically would have basically no rivals operating in India - as companies like China’s BYD are also fighting for a foothold. Provided they can manage to make a manufacturing facility there, Tesla should be able to get an early lead - and luckily for them, it seems like India is finally interested enough to begin removing barriers.
A new office space doesn’t guarantee Tesla will land this deal, but it’s way farther than they have ever gotten before. A GigaIndia announcement might not be so far away.