Electric vehicle (EV) giant Tesla is reportedly edging closer to building a new factory in India, with the facility to benefit from up to US$3 billion (A$4.57 billion) in investments.

    The Financial Times reports Tesla will be sending a team to India before the end of the month to study proposed sites for its EV factory.

    Sources told the publication Tesla is expected to invest US$2 billion to $US3 billion (A$3.05bn to A$4.57bn) towards building the future plant.

    Tesla CEO Elon Musk made his intentions to open a factory in India clear after meeting with Prime Minister Narendra Modi in June 2023, saying at the time that he was confident the brand would be “in India as soon as humanly possible”.

    This was strengthened by reports a month later which claimed Tesla would be meeting with India’s commerce minister.

    Previous reports have suggested the Indian factory would not only produce a new entry-level EV – sitting below the Model 3 sedan and Model Y SUV – for the local market but also for export globally.

    Mr Musk has since said the new model will first be produced in Texas before rolling down the production line at a planned Mexican factory – likely in 2026 – though it hasn’t yet ruled out India as a production hub for the cut-price EV.

    According to The Financial Times, its sources have said the Indian factory could produce up to 500,000 cars a year. 

    For context, the brand built 1,845,985 vehicles in 2023 across its two US factories (Fremont and Austin), plus its Berlin and Shanghai plants.

    A battery plant could reportedly follow near the proposed Indian EV factory, though plans for this aren’t as advanced as the car-focused facility.

    While India is the third-largest new car market in the world, EV sales accounted for about 6.4 per cent of deliveries in 2023 – an increase compared to its 2021 share of just 1.75 per cent.

    At present, all Tesla vehicles sold in Australia are exclusively built at the brand’s Shanghai factory.

    MORE: Everything Tesla

    Jordan Mulach

    Born and raised in Canberra, Jordan has worked as a full-time automotive journalist since 2021, being one of the most-published automotive news writers in Australia before joining CarExpert in 2024.

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