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Gigafactory India: A Feasible Enterprise for Tesla?

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The state of Karnataka is trying to persuade Tesla to make a substantial investment in the city of Bangalore (Bengaluru). Better yet, the Indian state is perhaps doubling down on its efforts. 

Last month, both parties reportedly held discussions about opening a R&D in the city of Bangalore. An anonymous government official stated that Tesla “has shown an interest to invest in a research and innovation center in Karnataka”. The official also said that “talks are at a preliminary stage.”

And now, according to The Economic Times, the state of Karnataka will propose something bigger to the automaker.

The Key Objective: Building a Gigafactory India

Principal secretary of Karnataka’s commerce and industries department Gaurav Gupta, outlined the objectives of the state. 

Gupta confirmed that Tesla has been offered “all support to set up a research and development center as well as the manufacturing unit.”. Gupta also stated that “Bengaluru has a favourable ecosystem for electric vehicles and Tesla can leverage on that.” The state official also remarked, however, that the negotiations are going to be a “long-drawn process”. On a more positive note, Gupta also added that “we (the state) will keep the sustained dialogue going.”

Gigafactory India: A Feasible Enterprise for Tesla?

Tesla has yet to officially comment on the matter at hand. CEO Elon Musk, however, tweeted last week that the company will set up shop in India “next year for sure.”

On the other hand, Musk remained vague, and did not give away any further information. 

Assuming that talks fructify, a move into the Indian market will make perfect sense for Tesla. Especially in Bangalore. Bangalore is widely regarded as the “Silicon Valley of India.” It has a booming IT and startup ecosystem. Indian technological corporations such as Infosys, Wipro and others, are headquartered there. The city is also host to many educational and research institutions, notably the Indian Institute of Science (IISc).

Additionally, Karnataka was the first Indian state to implement an EV policy back in 2017. The state intends to draw investments for that market segment worth ₹31000 crore. In U.S. dollars, it is the equivalent of $4,300,000,000 billion.

Te idea of setting up a “Gigafactory India” is very attractive from a commercial standpoint. According to Statista, the Indian consumer market is expected to amount to $1.7 trillion by 2026.

Additionally, Musk confirmed on Twitter last July that the company will build a Gigafactory in Asia outside China

The opportunity for Tesla to expand its Asian operations is ripe for the taking. And India will probably emerge as the strongest candidate.

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