Tesla in talks with Karnataka government for Gigafactory, R&D centre in Bengaluru

Karnataka has offered Bengaluru as the destination for Tesla’s Indian Gigafactory, and the company has already held preliminary discussions for a research and innovation unit in the city.

“We have offered Tesla all support to set up a research and development (R&D) centre and the manufacturing unit. Bengaluru has a favourable ecosystem for electric vehicles (EVs) and Tesla can leverage on that,” Gaurav Gupta, principal secretary of Karnataka’s commerce and industries department, told The Economic Times.

The potential Gigafactory will manufacture Tesla’s electric vehicles and batteries, but talks are preliminary and is likely to be “long drawn,” Gupta added.

“We are at it and we will keep the sustained dialogue going. We have briefed them about how Bengaluru is home to promising EV startups and also component makers and the advantages we offer,” he said.

Bengaluru is likely a shoo-in for Tesla as its Indian unit – acquired from Toyota in July, is based in the city. Besides, other EV makers such as Ather Energy, Bosch, Daimler, Mahindra Electric and Ola Mobility are also based in the area, which would guarantee required infrastructure.

Tesla did not respond to questions, as per the report.

The news follows CEO Elon Musk’s tweet on October 1 where he said Tesla’s entry to India would be in 2021. He was responding to the self-titled 'Tesla Club India™' account on Twitter, an unofficial India “fan club” of the manufacturer.

Next year for sure

— Elon Musk (@elonmusk) October 2, 2020

Analysts expect Tesla’s India entry to be “muted” given that public response to EVs in the market has been lukewarm, high cost of the vehicles putting it in the “very premium segment” and a lack of infrastructure for users in the country.