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Elon Musk Says Tesla Will Not Build A Gigafactory In India

Elon Musk has doubled down on his standoff with the Indian government saying, Tesla will not build a factory in the country unless it is first allowed to sell & service its cars.


By 2030, Tesla plans to build and sell 20 million vehicles a year. To put Tesla’s plan into context, in 2021, the EV maker sold a little over 930,000 vehicles, meaning in just 8 years, Tesla plans to grow vehicle production by over 20 folds.

This is an incredibly audacious target on Tesla’s part. And to achieve its 2030 goal, Tesla has been growing vehicle production at an impressive rate.

Just in 2022, Tesla has inaugurated 2 new factories on 2 continents. The first one was Tesla’s Gigafactory in Grunheide Germany. The plant is currently undergoing an initial production ramp producing only 86 vehicles a day.

However, in the last few days, Tesla has added a second shift to Giga Berlin and is in the process of adding 247 acres of land right next to the factory.

The second plant Tesla inaugurated is the EV maker’s factory in Austin, Texas. Giga Texas is currently the largest building in the world and is expected to produce 1 million vehicles a year. Recently Elon Musk has said Tesla will be extending the factory to make it exactly a mile long.

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In addition to the new facilities, Tesla has also been increasing production capacity at its operational plants. A new filing by Tesla China has revealed the EV maker plans to add a new plant adjacent to Giga Shanghai that can produce 450,000 vehicles a year.

Production at Giga Shanghai was halted in April in an attempt by the city to curb the spread of the COVID-19 pandemic. Currently, Tesla has restarted production and according to reports, has reached 70% production capacity before the lockdown.

And finally, Tesa’s oldest factory in Fremont California has also been increasing production. Recent flyovers suggest the factory is busier than at any time in its history.

All this new production capacity is all well and good and it will definitely enable Tesla to increase vehicle output by several folds. However, to achieve Tesla’s 2030 goal, the EV maker will still need to build several new factories around the world.

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And for the longest time, the country on top of the list to get Tesla’s next Gigafactory has been India. The subcontinent with over 1.3 billion people and a commitment from the government to transition to sustainable energy seems almost perfect as the location for Tesla’s next factory.

And since 2016 Tesla has been trying to enter the Indian market. Initially, Tesla’s plans were to start selling and servicing vehicles and eventually move to produce vehicles locally.

Back in 2020, Tesla started testing the Model 3 & Y in India. The EV maker also started setting up a research facility in the country. This brought a lot of excitement to the prospects of Tesla in India. However, Tesla’s plans in India have reached a dead end with the EV maker recently moving its Indian team out of the country and transitioning them to the Middle East.

The reason for this move is, that for Tesla to sell vehicles in India without incurring significant tariffs, the EV maker will need to either source 30% of parts for the vehicle from India or do final assembly in the country.

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However, before Tesla could commit significant resources in India, the EV maker first wants tariffs to be lifted so that it could assess demand for Tesla vehicles in the country.

However, after 2 years of back and forth. Both India and Tesla seem at an impasse. Tesla wants tariffs lifted before it commits to the country in significant ways and India wants Tesla to produce the vehicles locally before tariffs are lifted.

And recently Elon Musk added to the deadlock reiterating that “Tesla will not put a manufacturing plant in any location where we are not allowed first to sell & service cars.”

With this statement and Tesla’s recent moves to relocate Indian staff to other countries, it seems like the EV maker for the time being has given up on the country.

This is disappointing for India and Tesla. However, as of now, both show no signs of budging. We will keep you posted if there are any new developments in the story. Until then, make sure to visit our site regularly for the latest updates.

So what do you think? Disappointed Tesla will not be entering the Indian market? Also, who do you blame for the standoff? The Indian government or Tesla? Let me know your thoughts in the comments below.

Image: Courtesy of Tesla

For more information check out: Tesla Up 35 Spots On Fortune 500 List: 2021 Earnings

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.


Jing Vance (not verified)    June 1, 2023 - 2:40AM

India wants its cake and to eat it too. Musk is a businessman and it is logic to want
The ability to sell and service its cars before pouring in money for a manufacturing plant to be built in any country. India,‘S LOSS. Besides who in their right mind wants to put a plant in a country with hundreds of levels of bureaucratic wrangling and at least 2 years to get it to fruition when one can go to China z( with no red tapes) and a government that moves so quickly and efficiently within the blinking of an eye, Only the Chinese can do that! Believe me, not even the US.
Elon Musk is smart and these are all checked out before he makes the move. He did not become the worlds richest man without doing his homework.