Tamil Nadu to pitch itself aggressively as manufacturing site for Tesla

Tesla's Chief Executive Officer is set to visit India and meet with PM Modi, who's seeking a third term in office in federal elections starting later this month

By P R Sanjai and Dan Strumpf

India’s southern state of Tamil Nadu will aggressively pitch itself as a manufacturing site for Tesla Inc. as speculation builds about the US company’s planned investments ahead of billionaire Elon Musk’s visit. 

“Tamil Nadu will be pitching for all opportunities of electric vehicle manufacturing from all global car majors,” T. R. B Rajaa, the state’s minister for industries said, when asked if Tesla was on his radar. He added that the province, often called the Detroit of India for its automaking prowess, has country’s “best electric vehicle policies and ecosystem.”

Tesla’s Chief Executive Officer is set to visit India and meet with Prime Minister Narendra Modi, who’s seeking a third term in office in federal elections starting later this month. Luring investment from the EV giant will bolster Modi’s credentials — as well as the state’s where any plant may be set up — as being business friendly and in favor of creating jobs. 

Chennai, the capital city of Tamil Nadu, is wooing Tesla considering it’s already home to the manufacturing facilities of Nissan Motor Co., Renault SA, Hyundai Motor Co. and BMW AG and the auto parts supply chains that feed them. But it’ll face stiff competition from other Indian states that are also petitioning Musk.

Tesla has been weighing setting up an EV plant in India but hasn’t made any firm commitment. The world’s third-biggest greenhouse gas emitter is seeking to decarbonize its economy and turn net zero by 2070. India, which is also the world’s most populous nation, is seen as a potential new growth driver for Tesla as electric car sales growth in China and the US wavers. 

Demand for EVs in India, by contrast, is still on the rise. India also cut the import duty on EVs last month and said to get tax concessions, foreign companies will have to invest at least 4,150 crore rupees ($500 million) and start producing EVs from a local plant within three years.

Tamil Nadu is “already the automotive capital of the country,” said Rajaa. Now “we will aim at making the state the EV capital too.”