Tesla to Make Electric Vehicles in India for First Time

Electric vehicle maker Tesla has closed in on an agreement to make electric vehicles in India for the first time.

According to a Yahoo! Finance report, the company has picked Karnataka, a southern state whose capital is Bangalore, for its first plant.

The state’s chief minister announced the news over the weekend.

People familiar with the situation have said that Tesla has negotiated with local officials for six months and is actively considering car assembly in the suburbs of Bangalore.

The people, who remain anonymous, said Tesla is conducting due diligence for office real estate in the region and plans to set up an R&D facility.

The company has focused on Bangalore because it’s shaping up to be a hub for electric vehicles and aerospace manufacturing talent, the people said. Tesla has incorporated its Indian unit and registered offices in downtown Bangalore.

It was in January that Tesla CEO Elon Musk all but confirmed Tesla would enter India after months of speculation.

In a tweet on January 13th, Musk had written “as promised” in response to a report on a Tesla-focused blog about endeavors in India.

“Considering the price of a Tesla, Elon Musk probably won’t be able to sell an EV to most of the population in emerging economies,” said Pedro Pacheco, a Munich-based senior research director at Gartner Inc.

“However, looking at the size of the population and the potential for economic growth, Tesla will probably target a fast-growing group of affluent individuals that, in absolute terms, compares quite favorably to what we see in many developed countries.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.