Tesla CEO Elon Musk has said the company is planning to expand in India. It’s a commitment that could seal the location for the electric-vehicle manufacturer’s next car-assembly site.
Musk said he was confident
Tesla
(ticker: TSLA) will move into India “as soon as humanly possible,” after he met with India’s Prime Minister Narenda Modi in New York on Tuesday. He also said he was planning to visit India next year.
“Hopefully we’ll be able to announce something in the not-too-distant future,” Musk said.
The meeting looks to have given another boost to India’s chances of being the location for Tesla’s next factory. Musk said in May that the company was set to pick the location by the end of this year and that India was an interesting option.
Tesla currently operates factories in the U.S., Germany, and China, and has already confirmed plans for a fifth car-assembly site in Mexico. Expansion in India would be an important diversification of the company’s Asian supply chain away from China.
“I think there’s tremendous potential for all three pillars of the sustainable energy future,” added Musk. His pillars are renewable power generation, including wind and solar, battery storage for when the sun isn’t shining and wind isn’t blowing, and electric vehicles.
More than 60% of India’s power generation, based on recent government statistics, is based on coal and natural gas. Wind and solar account for roughly 16%.
India makes about 4 million passenger vehicles a year, with some for export. EV penetration of new car sales is lower than in the U.S., probably because EVs are more expensive to purchase upfront than traditional vehicles. EV-charging infrastructure is also a key concern of EV buyers.
Many new cars in India can cost $10,000 to $15,000 to purchase. Vehicle customers in India also buy far more two- and three-wheeled vehicles. About 16 million two- and three-wheeled vehicles were sold in 2022 compared to less than 4 million four-wheeled passenger vehicles.
Tesla shares were rising slightly in premarket trading on Wednesday. The stock closed up more than 5% on Tuesday on news that Rivian Automotive (RIVN) would adopt Tesla’s charging plug and technology.
Write to Adam Clark at [email protected]
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