PM Narendra Modi at the headquarters of Tesla Motors
PM Narendra Modi with Elon Musk, CEO of Tesla Motorsfacebook.com/PMOIndia

Elon Musk, the founder of US-based electric car manufacturer Tesla Motors, has hinted at setting up a Gigafactory in India to manufacture lithium-ion batteries in order to address the problem of power shortage in the rural areas of the country.

"Given high local demand, a Gigafactory in India would probably make sense in the long term," Musk tweeted.

If the plan is implemented, it would give the much-needed boost to Prime Minister Narendra Modi's efforts to bring Tesla's technology to the country to "power India's rural homes," the Business Standard said.

During his visit to the US last month, Modi held discussions with Musk at the Tesla campus in Silicon Valley on the potential of having a battery making facility and other renewable energy technologies in India. 

The Modi government aims to generate 100 GigaWatt of solar power by 2022. But the country has commissioned solar power plants with a total capacity of just 4.57 GW as on 22 October.

A study by Deloitte and the Confederation of Indian Industry in August showed that India has the capacity to produce 759 GW of solar power.

Tesla is already making a power storage device named as PowerWall, which is highly expensive for the Indian market. High cost and difficulties in raising its production "will likely keep the invention from coming to India any time soon."

Regarding Tesla cars, Musk said: "Auto import duties are prohibitively high. Hoping for a special category for EVs. Most of our discussion (with Modi) was on batteries."

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