As Tesla prepares to make a foray into India, a number of states are in a heated competition to win the investment of the electric vehicle (EV) behemoth. Although Tesla officials have surveyed sites in Delhi and Mumbai, these two cities are likely to have showrooms and not complete manufacturing units. Yet, the recent recruitment drive by the company in India suggests that it is seriously moving towards establishing operations in the country.
Andhra Pradesh Is a Strong Candidate
Maharashtra and Gujarat have been aggressively competing for Tesla’s interest by providing infrastructure support and incentives. But Andhra Pradesh (AP) has taken the lead, courtesy of aggressive initiatives spearheaded by Chief Minister Chandrababu Naidu. His administration, through Minister Nara Lokesh, has already met with Tesla officials and recently dispatched a revised proposal detailing the state’s benefits. Reports indicate that AP is providing significant incentives to make the deal more attractive.
Why Tesla Is Looking at Local Manufacturing in India
Tesla currently imports its cars into India, but high import duties make them extremely costly. Even ex-U.S. President Donald Trump had slammed such high tariffs, saying that they are barriers for American businesses. Seeing India’s thriving EV market, Tesla is now seriously contemplating local manufacturing to cut costs and increase its presence.
Andhra Pradesh’s Competitive Advantage
While Maharashtra and Gujarat are making solid offers, Andhra Pradesh has raised the stakes. The state has allegedly granted Tesla exclusive port rights to make imports and exports hassle-free—an attractive perk for the carmaker. The AP government has been busy working on the deal for more than a year. Last October, Minister Nara Lokesh visited the U.S. to meet with Tesla’s Chief Financial Officer, Vaibhav Taneja, and talk about investment prospects.
The Andhra Pradesh Economic Development Board (APEDB) has promised Tesla easily available land, world-class infrastructure, and hassle-free facilitation for establishing its factory. AP’s well-connected ports are a logistical benefit, and therefore, it is a great place for Tesla’s supply chain need. Moreover, South India accounts for nearly 60% of India’s EV sales, with tremendous demand in Telangana, Karnataka, Tamil Nadu, and Kerala. Having a manufacturing unit in Andhra Pradesh would give Tesla a strategic leadership role in this emerging market.