Tesla enters India, sets shop in Bengaluru; Gadkari confirms news
After years of speculation and a failed pre-order attempt, Tesla has finally entered India. And this time it's for real because the company has registered an Indian arm in Bengaluru, Karnataka. Tesla's Registrar of Companies (RoC) filing names a new entity Tesla India Motors and Energy Private Limited. The company is classified as a foreign subsidiary headquartered in the business district of Lavelle Road.
This development isn't surprising since Union Minister Nitin Gadkari himself had confirmed back in December that Tesla would begin its India operations this year. Gadkari had also revealed that the company's initial sales will be Completely Built-up Units (CBU), which are total imports attracting a staggering 100 percent import duty. However, the government could extend some tax incentives considering its push for green technologies.
If Tesla takes the CBU route, it makes sense for it to field its cheapest offering, Model 3, to mitigate the effect of high import tariffs. This theory is further supported by Tesla's ROC filing reflecting an investment of Rs. 1 lakh, with a further authorized capital of Rs. 15 lakh. That isn't nearly enough for an R&D center, much less a manufacturing plant.
While traditional car manufacturers tend to favor Chennai, Pune, or Haryana while setting up Indian operations, Tesla seems to have chosen Bangalore primarily for its history with electric vehicles. That's because the city is not only known for its IT expertise, but also for being home to the Reva Electric Car Company, which also exported the G-Wiz electric vehicle to UK until 2012.
While Tesla has made a token initial investment to set shop in India, it is expected to consider setting up an R&D center and possibly even a manufacturing plant depending on the demand. However, die-hard Tesla fans in India haven't forgotten that the company didn't hold up its end after accepting $1,000 as pre-order fees for the Model 3 back in 2016.
