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Tesla May Build Battery Factory In India

Tesla has plans to build and market battery storage in India and has applied for government subsidies, Reuters has reported, citing unnamed sources close to the company.

The news follows earlier reports that the EV maker was discussing the construction of an EV factory in the country. The proposed factory would have an annual capacity of half a million electric vehicles.

These vehicles will be low-cost models, with a price tag of some $24,000, Reuters noted in its latest report.

Initially, Tesla had plans to set up shop in India last year but scrapped those plans when the Modi government refused to lower import taxes on cars—these taxes in some cases reach 100%, which would make Teslas prohibitively expensive. The idea of the government was to motivate Tesla to manufacture cars locally rather than import them.

The Indian government has poured some $3.2 billion in the form of incentives for the industry, CNBC reported earlier this year, attracting $8.3 billion in investment. Some of the world’s biggest carmakers including VW, Volvo Cars, and Stellantis, are also venturing into the EV market on the subcontinent.

It seems this has worked for the EVs, at least. According to the Reuters source, subsidies for battery storage systems production will not be forthcoming. On the other hand, New Delhi could incentivize Tesla to go ahead with the project by offering subsidies to the future buyers of those systems.

Tesla is the maker of the Powerwall storage systems that can store energy from a solar installation or from the grid for use during the dark hours of the day or during outages.

It appears, based on these reports, that India is a key expansion target for Tesla. Per the Reuters sources, the company is eyeing a market not only for its residential battery storage systems but for its industrial offering, as well. Earlier reports cited more sources as saying Tesla was viewing the subcontinent as an export hub for the Indo-Pacific region.

By Charles Kennedy for