Andhra Pradesh renews pitch to Tesla for EV manufacturing unit: Report

In 2017, then-Chief Minister N. Chandrababu Naidu signed a memorandum of understanding with Tesla, and Musk had promised to provide technological expertise for two solar energy storage units in Rayalaseema.

Andhra Pradesh has stepped up efforts to attract Elon Musk’s Tesla to establish its much-anticipated electric vehicle (EV) manufacturing unit in the southern part of the state, The Economic Times reported.

According to highly placed sources cited by The Economic Times, the state’s Economic Development Board (EDB) has positioned Andhra Pradesh as an ideal destination for Tesla, highlighting its port connectivity and availability of land. Talks with the EV giant were first initiated in October 2024, when state minister Nara Lokesh met Tesla’s Chief Financial Officer Vaibhav Taneja during his visit to the U.S.

Following Prime Minister Narendra Modi’s meeting with Musk and Tesla’s ongoing hiring spree in India, Andhra Pradesh has renewed its efforts to secure the investment, The Economic Times reported.

The state has put together an attractive package of incentives, including ready land parcels, to differentiate itself from other states vying for Tesla’s attention. Initially, the company may focus on importing cars before setting up a full-fledged manufacturing facility.

“The port access will help the company in importing cars. Also, if it sets up a manufacturing plant in southern Andhra Pradesh, there is a readymade ecosystem of auto companies, battery manufacturers, and ancillary suppliers here,” a source told The Economic Times.

Andhra Pradesh is also emphasizing that South India is a key market for EVs, accounting for nearly 60% of India’s four-wheeler EV sales, spread across Kerala, Telangana, Tamil Nadu, and Karnataka.

This is not the first time the state has attempted to bring Tesla on board. In 2017, then-Chief Minister N. Chandrababu Naidu signed a memorandum of understanding with Tesla, and Musk had promised to provide technological expertise for two solar energy storage units in Rayalaseema.