Elon Musk

Tesla CEO Elon Musk has been tweeting about setting up operations in India since 2017.

Tesla’s churning away, pushing to complete two new gigafactories near Berlin, Germany and Austin, Texas while expanding its production capabilities at its plant in Shanghai.

Now the company reportedly plans to set up another plant in southern India, according to multiple reports. The new plan calls for the EV maker and world’s most valuable automaker to build a new plant Indian state of Karnataka, according to a government document seen by Reuters on Saturday.

“The U.S. firm Tesla will be opening an electric car manufacturing unit in Karnataka,” the state government said in a statement, which was part of a document highlighting India’s budget to its people in the local language of Kannada, Reuters reported.

Musk’s been talking about India for some time

In fact, he’s been talking about it since 2017, when he tweeted, “In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built.”

Tesla small car rendering front

Ever since Musk told crowds at Battery Day last year a small car was on the docket, the renderings have been coming. (Credit: KDesign AG)

The plan had been for Tesla to begin selling vehicles in India in 2017, but clearly based on his missive, that got derailed by a bigger issue. According to earlier tweets, Musk believed that in order to sell vehicles in the country, at least 30% of the components would need to be locally sourced. The new site could be just that.

The company completed several steps last month, establishing Tesla Motors India and Energy Private Limited with its registered office in the city of Bengaluru in Karnataka, a hub for global technology companies. Officials suggested Tesla would start with a research and development facility, which would grow into a production site.

In recent weeks, Tesla CEO Elon Musk tweeted several times about the company’s desire and plan to establish operations in the massive country. In December, he tweeted out a confirmation of the move, including a launch of sometime this year.

India’s appeal for automakers

For many automakers, India’s seen as an untapped market due to its large population and growing economy. However, much of that is in its infancy still, slowing the investment in the physically infrastructure that company’s like Tesla needs.

Tesla small car rendering rear

After driving a Model X in Germany, Musk told a crowd a small hatchback would be on the company’s agenda. (Credit: KDesign AG)

For example, Ford recently ended talks with Mahindra & Mahindra after the two companies failed to come up with a workable plan and missed a Dec. 31 “longstop,” or expiration date, for the agreement they had announced 14 months earlier. The plans initially called for the pair to develop a low-cost and an electric vehicle for the country and region.

However, the company still produces the EcoSport SUV in the country, exporting them to the U.S. It also invested heavily into its Chennai facilities. Conversely, General Motors pulled up stakes and left the country, declining to even sell vehicles there anymore.

Officials are trying to change that while also reducing its dependence on oil and improve air quality. A slew of new electric vehicles would certainly help that. India plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities, Reuters reported last year.

Tesla may have just the vehicle for India

One of the vehicles that could be sold there is the reported Model 2. During the company’s battery day last fall, Musk said the company was working on a small vehicle that would be priced around $25,000. Initially, he said it would take three years before it would arrive.

However, he followed that up during a later visit to Germany, noting the company really needed a small hatchback for countries like Germany, where after tooling around Berlin in a Model X, his group repeatedly found it difficult park and travel on certain roads.

This grew into the “Model 2.” Rumors suggest it will initially be built at the Shanghai plant. Now that would make sense for several reasons, starting with the fact that the site is already shipping vehicles to Europe so sending a new small car there wouldn’t be any problem.

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