Elon Musk is negotiating with India. The fate of Tesla’s Gigafactory hangs in the balance

Elon Musk is trying to dynamically expand Tesla’s production base around the world. Further plants were opened in China, then Germany, and the company is also planning to expand in Mexico. The electric car maker has also had its eye on India for some time. However, the country’s authorities do not intend to kneel before Musk.

Elon Musk wants a Tesla Gigafactory in India – the country sets conditions

In June 2023, Indian Prime Minister Narendra Modi met with Elon Musk. It took place on the occasion of the official visit of the head of the Indian government to the USA. It was then that the plans to build the factory were to gain the first blush, because Modi quite clearly encouraged the billionaire to invest in his country. This also fits in with the global trend of reducing the presence of US companies in China.

Now Reuters reporters have reached the latest information. According to information from three anonymous sources, Tesla has been in serious talks with India for many weeks. The country’s position seems to be much stronger than Musk’s, because he has to meet a number of expectations of the Indian authorities.

The basic condition is to recreate the way Apple moved production to India – it’s about strengthening local business and suppliers. Currently, the domestic automotive industry is heavily dependent on imports from China.

India wants Tesla to get Chinese partner companies to set up joint ventures in India. This will strengthen both parts production and the entire supply chain in the country. This is not an easy task, because Chinese companies are scrutinized in detail after the 2020 China-India border crisis.

The stakes for Gigafactory India are high. At the moment, Tesla’s cheapest car sold in India – the Tesla Model 3 with rear-wheel drive – costs $42,990. Once a local plant is built, that price could drop to as low as $24,000, opening up a giant market for Elon Musk.

Tesla Gigafactory Mexico will be built

Earlier in 2023, Tesla secured another Gigafactory project. Elon Musk and Mexican President Andres Manuel Lopez Obrador were to reach an agreement on an investment that could have a key impact on the country’s economy.

Musk announced last year that Tesla was looking for a suitable site to build another production facility in North America. Locations in the United States, Canada and Mexico were considered. It settled on the latter location. The plant is to be built in Monterrey – a city in the north-east of the country, about 200 km from the border with Texas.