Tesla in talks with Reliance to set up EV manufacturing unit in India

Tesla may be looking for a local partner to set up its operations in India. Highly placed sources say the US electric car major is in talks with Reliance Industries for a possible joint venture to build a manufacturing facility in the country.

• Read also:Tesla’s entry into India will be a “natural continuation”, says Elon Musk

“The talks are in the early stages and have been going on for more than a month,” said a person familiar with the development. The source said the move should not be considered as RIL’s entry into the car space. RIL’s objective in the joint venture is to build capacity for electric vehicles in India.

“Though RIL’s role is yet to be made clear, it is expected that the Indian consortium could take a major role in establishing a manufacturing facility and Tesla ecosystem in India,” said another source familiar with the matter. . In 2023, RIL, in collaboration with Ashok Leyland, launched India’s first hydrogen-powered internal combustion heavy-duty truck. RIL also launched removable and replaceable batteries for EVs last year.

An email sent to Reliance Industries and Tesla remained unanswered till press time.

Enter Tesla

Tesla is said to have earmarked $2 billion for its upcoming plans in India. The company has been looking at many places, including Gujarat and Maharashtra, for setting up the plant. Sources said that Maharashtra may emerge as a preferred location. “Tesla plans to use the facility for both internal and external purposes, and therefore, may prefer a suitable location for port facilities,” said the source quoted above.

In the X (formerly Twitter) Space session with Nicolai Tangen, CEO, Norges Bank Investment Management, Elon Musk, CEO, Tesla said: “India is now the most populous country in the world, in terms of the number of people. India should have electric cars like every other country has electric cars. It is a natural step to offer Tesla electric cars in India,” confirming Tesla’s entry into India.

Looking for a partner

Top Tesla officials are expected to visit the country to finalize the factory location in a month or so and shed light on the joint venture with RIL. Sources add that since the JV talks with RIL are not exclusive, Tesla may look for another domestic partner if the ongoing talks are not fruitful.

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In March, the government approved a new electric vehicle program with some tax relief. The policy aims to position India as a global hub for electric vehicle manufacturing.