Tesla, under the leadership of Elon Musk, is nearing an agreement with India to allow the export of its electric vehicles to the country starting in 2024. As part of this arrangement, Tesla intends to establish a factory within two years, and there's potential for an announcement to be made at the Vibrant Gujarat Global Summit in January. Insiders suggest that Gujarat, Maharashtra, and Tamil Nadu are potential locations for the factory, given their robust ecosystems for electric vehicles (EVs) and export capabilities. Tesla is anticipated to commit an initial investment of around $2 billion for the plant, aiming to increase purchases of auto parts from India to approximately $15 billion.

The company is investigating the prospect of producing batteries in India to lower expenses. Indian Trade Minister Piyush Goyal recently toured Tesla’s facility in Fremont, California, expressing admiration for the automaker’s connections with New Delhi. Minister Goyal indicated Tesla's plan to double its imports of components from India, underscoring the increasing significance of Indian auto component suppliers in Tesla's EV supply chain.

The Modi government has actively advocated for domestic EV manufacturing and the swift adoption of eco-friendly transportation. There's a reported surge in demand for EVs among India's aspiring middle-class consumers, presenting an opportunity for Tesla. Current high tariffs hinder Tesla from directly importing cars to India, but once locally manufactured vehicles enter the market, they might potentially be priced as low as $20,000. Elon Musk has previously voiced concerns about India's high import taxes and EV policies. In response, India has advised Tesla against selling cars in the country that are manufactured in China. The evolving collaboration between Tesla and India mirrors the government's commitment to fostering a cleaner and more sustainable transportation environment.