Tesla coming to India soon; setting up first R&D facility in Bengaluru

Tesla, one of the largest electric car maker, is all set to make its foray into the world's fourth largest automobile market. India is home to many international car brands, but there's eagerness to welcome the Elon Musk-backed electric car brand to the country. And it finally might be possible sooner than later as Tesla is in talks with Karnataka government officials to set up an R&D facility in Bengaluru.

"Tesla has shown initial interest to invest in a research and innovation centre in Karnataka and the talks are at a preliminary stage," one of the people familiar with the developments told ET. According to the report, a follow-up meeting is expected later this month. The state officials are to present a detailed proposal to Tesla execs in the next meeting.

The development comes shortly after Tesla boss hinted that his luxury electric cars will "hopefully" come to India soon. This is a step in the right direction.

A win-win situation

Bengaluru is already home to several global companies' R&Ds, serving as a special place for EV startups such as Ola Electric, Sun Mobility and Ather. Karnataka was also the first state in India to formulate an electric vehicle policy with hopes to generate investments of Rs 31,000 crore in EV R&D and manufacturing. Other states, however, followed Karnataka's lead with their own policies.

With Tesla taking interest in Karnataka's capital, it's not a one-side victory. On one hand, Tesla is going to have exposure to an untapped market, which is still considered niche. India's EV market is expected to touch Rs 50,000 crore by 2025. And Tesla, for the brand that it has built internationally, will easily win over potential consumers in India.

As for Karnataka, it stands to win big out of this deal as well. Due to the COVID-19 pandemic, state economies and even national economy has taken a huge hit. By attracting foreign investment, Karnataka government could restart the economy. It works out to be a win-win situation for both Tesla and Karnataka government.