Elon Musk Poised To Announce New Gigafactory During His Visit to India Later This Month

Tesla and India have a long history of courting and teasing, and both parties are interested in setting up local production. However, neither wanted to do that without getting something in return, making the talks yield no results for years. Last year, after Musk met with the prime minister of India, Narendra Modi, in New York, the two seemed to have reached an agreement. It was not the smooth sailing everyone expected, though.

Tesla is looking to build a local gigafactory in India to serve a potentially huge but mostly unexplored EV market in the region. However, it wants to start selling its EVs in the country before committing to local production. The Indian government, on the other hand, has been reluctant to give Tesla preferential treatment and drop the 100% import tariffs. Both parties stubbornly stuck to their positions, which explains why little progress was made.

However, things have started moving in the past months, as new rumors indicate an Indian gigafactory announcement could be made soon. To give more substance to these rumors, Tesla began to produce RHD variants of the Model Y at Giga Berlin. The production is destined for exports to India. Importing China-made EVs into the country is a big no due to the historic rivalry between India and China.

New rumors claimed Elon Musk would fly to India in the week starting April 22 to meet the Indian Prime Minister Narendra Modi. This indicates that an Indian gigafactory announcement could happen then. The moment is interesting, considering that Tesla will hold its Q1 2024 earnings call on April 23. Musk's visit was originally reported by Reuters, but Musk has since confirmed the information in a post on X, his own social media network.

Based on previous rumors, Tesla is looking to set up a local gigafactory to build an affordable EV at a price below $24,000. The initial investment is $2 billion, which should be enough to start local production. It's unclear what an Indian gigafactory announcement means for the delayed Giga Mexico plans. Tesla is working on an affordable EV model built on its Gen-3 architecture, but earlier rumors indicated that Tesla might have postponed a launch to pursue robotaxi production instead.

Musk's visit to India comes at a moment when the country heads into a two-month-long election starting April 19. Tesla Gigafactory announcement will bolster Narendra Modi's position. Starting production in India is also Tesla's ticket to fighting cheap Chinese EVs amid slowing demand for electric vehicles in Tesla's most important markets, including the US and China. The Indian EV market is small, with about 2% of total car sales in 2023, but the growth potential is immense. The Indian government is targeting 30% by 2030, according to Reuters.