Elon Musk’s Tesla has started looking for land to set up an electric vehicle (EV) manufacturing plant in India, with Maharashtra being its top choice, according to a report by The Economic Times.

The report also mentions that Tesla has contacted executives at Tata Motors for a possible partnership. This move comes after Musk’s recent meeting with Prime Minister Narendra Modi in the US. Tesla is also asking for policy benefits, such as lower import duties on EVs, to help make its entry into the Indian market smoother. Maharashtra is strategically important for Tesla because the company already has an office and several suppliers in Pune. Government officials have suggested possible locations in Chakan and Chikhali, both near Pune. These areas are major automotive hubs, home to big manufacturers like Mercedes-Benz, Tata Motors, Mahindra & Mahindra, Volkswagen, and Bajaj Auto.

Tesla is still in discussions and considering various factors before making a final decision. One important factor is choosing a location close to a port, which would make transportation and exports easier. The Maharashtra government is being careful, as it has previously missed out on major projects like the Vedanta-Foxconn semiconductor plant and the Tata-Airbus aircraft project to other states. With strong competition, there is still a chance that Tesla might choose a different location. Tesla has posted openings on LinkedIn for 13 positions in the areas of operations, business development, customer support, sales, and vehicle servicing, indicating a renewed focus on India. These positions are located in Delhi and Mumbai, suggesting that Tesla will probably open sales shops there.   

According to reports, Tesla has also contacted executives at Tata Motors, a prominent EV producer in India, possibly to discuss potential joint ventures. It is anticipated that upon his return, senior executive Prashanth Menon, who oversaw Tesla's operations in India before being transferred to the Netherlands in 2022, will be key in the company's India strategy, according to the report. Tesla has been considering entering the Indian market for years. In 2021, the company planned to set up a showroom and office in Mumbai’s Lower Parel but later dropped the idea. This was due to the Indian government's decision not to lower import duties on Tesla cars. Tesla had suggested reducing the tax on fully assembled electric vehicles priced under $40,000 from 60% to 40%. In return, the company promised to set up a manufacturing plant in India after evaluating market demand. However, the Indian government declined the request for tax cuts at that time.

In 2023, Tesla executives met with the Indian government to discuss sourcing local components. Later, the company leased office space in Pune, adding to speculation about its plans in India. Elon Musk also had meetings with Prime Minister Modi, further fuelling expectations. In 2024, India introduced a new EV policy, offering tax benefits to companies that invest at least $500 million. Many expected Musk to announce Tesla’s investment during his planned visit to India in April 2024. However, he cancelled the trip due to urgent business matters and instead travelled to China. Tesla is still considering establishing a manufacturing base in India because of the country's growing EV market and changing regulatory environment. The location of the facility will ultimately be decided by discussions with state governments and the venture's overall viability.