Bengaluru may have a Tesla Gigafactory: Report

Karnataka government is keen on pushing Bengaluru as a potential location for Tesla's Gigafactory where it can manufacture electric cars and batteries, The Economic Times reported, quoting sources.

The news comes amid increasing speculation of the electric vehicle (EV) giant arriving in India both to sell and manufacture the prized EV On October 2, Musk himself tweeted that Tesla would make an entry to India "Next year for sure."

Tesla’s entry into India would be a big boost for Prime Minister Narendra Modi’s “Make in India” programme.

Read | India's long wait for Tesla to end next year

“We have offered them (Tesla) all support to set up a research and development centre as well as the manufacturing unit,” Gaurav Gupta, principal secretary of Karnataka’s commerce and industries department, told ET.

“Bengaluru has a favourable ecosystem for electric vehicles and Tesla can leverage on that,” he added.

The world's most valuable carmaker had held preliminary talks with Karnataka government officials on September 10, for possible investments in a research facility in Bengaluru.

Also read: Tesla in talks with Karnataka government to set up research centre in Bengaluru

Gupta said that even though the talks were preliminary, the state government is trying to keep sustained dialogue going.

“We have briefed them about how Bengaluru is home to promising EV startups and also component makers and the advantages we offer.”

A senior analyst at Counterpoint Research highlighted that due to lack of infrastructure and government support, Tesla may not be ready to invest in infrastructure.

“Tesla coming to India would not have such a major impact on the market, because first of all it’s a very premium segment, maybe around Rs 40 lakh or so even for the Model 3... I don’t think Tesla will invest so much in infrastructure because there are no economies of scale here,” the analyst told the publication.

In January, Tesla which overtook Toyota to become the most valuable carmaker in the world, opened a Gigafactory in Shanghai. Later in the year, Musk tweeted that the company will look at another Gigafactory in Asia, outside of China.

If the talks come to fruition, India will be the second country outside of the US to have a Tesla research centre, the first being China.

(With agency inputs)