Photo: Tesla | Edited
Although India appeared to have lost Tesla investment, recent developments show that Elon Musk's company is about to start constructing a local gigafactory. The new facility will produce the new affordable EV that will first launch from Giga Mexico, with a planned annual capacity of 500,000 EVs.
Tesla has long ago included India in its expansion plans. Still, the EV maker has not even started selling its EVs in the country, and the charging infrastructure is almost non-existing. Elon Musk has met with the Indian prime minister Narendra Modi several times. In 2020, he was confident Tesla would start sales in India by 2021. Plans fell apart after the local government refused to offer incentives for the made-in-China models. With 110% tariffs on cars imported from China, Tesla's Indian adventure was over before it started.
While the Indian government insisted that Tesla start local production, Musk wanted to see how its cars sold in the country before committing. However, times are changing, and an Indian gigafactory is again on the menu. Having all the eggs in one basket is not very wise, and doing business in China is controversial, even with Musk's strong ties with local leaders. That's why rumors about a gigafactory in India started to resurface in May.
At the end of June, Musk met with Narendra Modi in New York and promised that Tesla would be in the country "as soon as humanly possible." He also announced a "manufacturing base" in India, which doesn't necessarily mean a car gigafactory. Still, as Tesla is looking for a place to build its next gigafactory, India might be the perfect place.
There is more information confirming this scenario coming from Indian news outlets. According to sources cited by The Times of India, Tesla is negotiating with the Indian government to construct a car factory with an annual capacity of up to 500,000 EVs. There was no word about the specific models planned to be produced in India. Still, the newspaper's sources suggest it will be an affordable EV, with a starting price of 2 million rupees (about $24,000).
This description fits the next-generation EV that Tesla plans to produce at Giga Mexico in 2025. The new affordable EV will be a compact crossover, akin to a smaller Model Y, built using a revolutionary manufacturing process Tesla calls unboxed vehicle. The EV maker wants to sell millions of these EVs, so it tailored Giga Mexico for a production capacity of 2 million EVs per year. This would easily be Tesla's biggest gigafactory, surpassing even Giga Shanghai.
Once it sets up Giga Mexico, Tesla will copy/paste it in India, albeit at a smaller scale. Still, the 500,000 capacity of Giga India will likely cover only Phase 1, with plans to expand capacity in the future. Considering India's highly skilled and cheap labor, the country is ideally positioned to produce this high-volume EV. In addition to selling these cars on the local market, Tesla will also export them throughout the region.
While the Indian government insisted that Tesla start local production, Musk wanted to see how its cars sold in the country before committing. However, times are changing, and an Indian gigafactory is again on the menu. Having all the eggs in one basket is not very wise, and doing business in China is controversial, even with Musk's strong ties with local leaders. That's why rumors about a gigafactory in India started to resurface in May.
At the end of June, Musk met with Narendra Modi in New York and promised that Tesla would be in the country "as soon as humanly possible." He also announced a "manufacturing base" in India, which doesn't necessarily mean a car gigafactory. Still, as Tesla is looking for a place to build its next gigafactory, India might be the perfect place.
There is more information confirming this scenario coming from Indian news outlets. According to sources cited by The Times of India, Tesla is negotiating with the Indian government to construct a car factory with an annual capacity of up to 500,000 EVs. There was no word about the specific models planned to be produced in India. Still, the newspaper's sources suggest it will be an affordable EV, with a starting price of 2 million rupees (about $24,000).
This description fits the next-generation EV that Tesla plans to produce at Giga Mexico in 2025. The new affordable EV will be a compact crossover, akin to a smaller Model Y, built using a revolutionary manufacturing process Tesla calls unboxed vehicle. The EV maker wants to sell millions of these EVs, so it tailored Giga Mexico for a production capacity of 2 million EVs per year. This would easily be Tesla's biggest gigafactory, surpassing even Giga Shanghai.
Once it sets up Giga Mexico, Tesla will copy/paste it in India, albeit at a smaller scale. Still, the 500,000 capacity of Giga India will likely cover only Phase 1, with plans to expand capacity in the future. Considering India's highly skilled and cheap labor, the country is ideally positioned to produce this high-volume EV. In addition to selling these cars on the local market, Tesla will also export them throughout the region.
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