Tesla Is In Talks To Set Up A R&D Center In Bengaluru

India might not have yet managed to get Tesla production lines into the country, but it appears that India could soon be home to a Tesla research facility.

Tesla has held exploratory discussions with Karnataka government officials around a possible investment in a research facility in Bengaluru, ET reported. A follow-up meeting is expected later this month. During this meeting, state officials are expected to present a detailed proposal to the Tesla executives. “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 officials said. If talks fructify, India will be the second country outside of the US where Tesla will have a research centre.

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Karnataka has done the groundwork to be wooing Tesla — it was the first state in India to come up with an electric vehicle policy, and had hoped to generate investments of `31,000 crore in EV R&D and manufacturing. Tesla CEO Elon Musk has on several times indicated that Tesla would like to come to India. All the way back in 2015, Musk had tweeted that Tesla was in talks with the Indian government to bring their electric vehicles to India. A year before that, PM Narendra Modi had visited the Tesla factory in the California, and had discussions with Elon Musk. These plans didn’t quite materialize, and Tesla went elsewhere — it ended up opening a factory in China, and another in Germany. 

That was nearly seven years ago, and much has changed in the meanwhile. After years of dilly-dallying, fellow US company Apple is finally in India, and is assembling its phones in the country. Apple also has opened a large office in Hyderabad, and will soon open online and retail stores for Indian customers. Bengaluru is not only India’s tech capital, but also hosts manufacturing companies including Daimler, Bosch and Mahindra Electric. It is also home to EV startups including Ola Electric, Sun Mobility and Ather. Apple’s iPhone assembly factory is also in the outskirts of Bengaluru in Peenya.

A research center might be an ideal stepping stone for Tesla to enter India. Bengaluru has no dearth of professional talent, and if the government can incentivize Tesla through tax breaks and other concessions, the world’s most valuable carmaker might well open a research facility. A research facility might end up paving the way for Tesla setting up a manufacturing unit in India — the Indian government has been setting ambitious targets for the adoption of electric vehicles, and Tesla too would be keen to tap into one of the world’s largest markets. It’s still early days, but a lot might ride on how the talks between Tesla and the Karnataka government pan out.