Tesla Eyeing Assembly Plant In Satara: Report

Moving closer to its India entry, EV giant Tesla is reportedly planning to set up an assembly unit in Maharashtra’s Satara.

A Business Standard report said that the Elon Musk-led company will be setting up a completely knocked down (CKD) plant which would help in keeping its component import duty costs in check.

CKDs are assembly plants where all the different finished components of a vehicle are shipped from different locations and facilitates local assembly capabilities for a company.

Inc42 has reached out to Tesla with queries. The story will be updated after receiving responses.

The development comes a couple of months after it was reported that Andhra Pradesh government has been making all efforts to attract investments from the global EV maker by providing incentives and its economic development board also prepared a pitch for the same. But the efforts seem to have fallen apart.

Citing source, the above report further said that Tesla was in talks with Hyderabad-based Megha Engineering and other other companies to acquire land in a joint venture for its CKD efforts, but the discussions could not make further progress.

Besides, it is expected that Tesla would be able to launch its own assembled EVs by the last quarter of the current fiscal year.

The development comes at a time when Tesla’s India head, Prashanth Menon has stepped down from its position. It is further reported that Menon has made its call to quit for personal reasons.

Earlier it was reported that the state of Maharashtra had offered land to Tesla in cities such as Chakan and Chikhalin near Pune. Chakan is touted as a hub for automobile manufacturers in India with homegrown players like Mahindra and Tata Motors having their presence in the region. Satara also houses autocomponent provider Cooper Corporations. Other states like Gujarat and Tamil Nadu were also in the race to host Tesla to set up its manufacturing unit.

Currently it is not clear how much land Tesla will acquire for its assembly plant endeavour.

Tesla has already finalised locations in Delhi and Mumbai to set up its showrooms and has also sealed its deal with coworking space entity EFC to lease a 30-seater office space in Mumbai’s Bandra-Kurla Complex (BKC), with a monthly rent of INR 3 Lakh.

According to its website, Tesla is also hiring people in India for at least 30 positions in various functions.

Tesla’s India entry efforts have picked up speed and the country’s new EV policy has become more favourable to its business success. As per the new policy introduced in March last year, companies would have to pay lower duty on imports of EVs if they agree to set up manufacturing facilities in the country.

The policy outlines that import duty on vehicles with cost, insurance and freight (CIF) value of $35,000 or above will be slashed by 15% for five years for companies which agree to invest at least INR 4,150 Cr (about $500 Mn) in India to set up manufacturing facilities.

Besides, India is also looking to mark down import duties on 35 items used to make EV batteries to attract overseas investments in the sector.