Tesla Seeking Partnership With Reliance For EV Manufacturing Unit In India

Tesla is seeking a local partner to establish its operations in India. The electric car maker is in talks with Reliance Industries for a potential joint venture to build a manufacturing unit in the country.

“Talks are at initial stages and have been ongoing for over a month,” The Hindu Business Line reported, citing a person close to the matter.

It is important not to interpret this move as Reliance Industries’ entry into the automobile industry. Instead, Reliance Industries aims to leverage the joint venture to develop electric vehicle capabilities within India, said a source as mentioned in the report.

Another source, familiar with the situation, suggested that while Reliance Industries’ specific role has yet to be fully defined, it is expected that the Indian conglomerate could play a substantial part in setting up the manufacturing facility and the accompanying ecosystem for Tesla in India.

Last year, Reliance unveiled its swappable and multipurpose battery storage technology for EVs at the Renewable Energy India Expo 2023 in Greater Noida. These swappable and multipurpose batteries can also be used to power household appliances through an inverter.

In its 2023 AGM, Reliance shared its plans to set up a battery gigafactory by 2026. It secured the Central government’s backing last year, under the Production-Linked Incentive (PLI) scheme, to set up a 5-gigawatt hours (GWh) battery manufacturing facility.

Meanwhile, Tesla is preparing for its first major shipment into the country and also has plans for a major manufacturing push. Reports suggest that Tesla has initiated the production of right-hand drive vehicles at its facility in Germany, marking progress towards a potential entry into the Indian market later this year.

Moreover, Tesla Motors will be reportedly sending a team to the country later this month to scout locations for its first $2-$3 Bn factory.

Tesla’s chief executive officer Elon Musk has said that India, like every other country, should have electric cars and it will be a “natural progression” for his company to foray into India’s electric vehicle market.

Tesla is venturing into the Indian electric vehicle (EV) market amidst a backdrop of dwindling demand in its primary markets, the United States and China. In China, the company faces formidable competition from domestic original equipment manufacturers (OEMs), while in the US, quality and manufacturing concerns have adversely affected its reputation and market share.