Tesla is finalizing an agreement to make electric vehicles in India for the first time to capture a new growth opportunity, according to Bloomberg. The EV maker has been negotiating with local officials for six months and is actively considering car assembly in Bangalore for the first plant. 

  • Tesla is reportedly conducting due diligence for office real estate in Bangalore and plans to set up a research and development facility.
  • Tesla has focused on Bangalore because it’s shaping up to be a hub for EV and aerospace manufacturing talent.
  • The EV maker has incorporated its Indian unit and registered offices in downtown Bangalore.
  • On January 13, Tesla CEO Elon Musk confirmed that the company would enter India.
  • Entry into India could prove problematic for Tesla as the country hasn’t yet welcomed EVs like China.
  • Although India has been making moves to roll out competitive EV models, the progress has been of a small scale. 
  • In 2015, India launched a Faster Adoption and Manufacturing of Hybrid and EV (FAME) plan, with a 9 billion rupee ($123 million) commitment to subsidies.
  • India has also cut the goods and services tax on EVs to 5% from 12%, much lower than the levies of as much as 28% charged on other motor vehicles. 

Tesla stock is currently gaining. TSLA: NASDAQ is up 0.18% on premarket.