Tesla Courted by Two India Ports to Build New Factory

Tesla Courted by Two India Ports to Build New Factory

Photo credit: Backstage With Millionaires

As Tesla looks for ways for the company to enter the Indian market, and is about to open an R&D center in Bangalore, other states continue to fight in the hope that the company will open its production in their states. The state of Gujarat joins the competition inviting Tesla to locate its plant in Kandla or Mundra, India's largest ports.

While there is currently no evidence that Tesla is going to build a factory in the country, Indian politicians continue to hint at it. Since the import tax on cars in India is very high, it would make sense for the California-based manufacturer to build at least an assembly plant there, which would help solve this problem.

Hellenic Shipping News reported that Kandla and Mundra are looking to bring Tesla to build their facility there. SK Mehta, Chairman of Center-owned Deendayal Port Trust (in Kandla) said: "The Smart Industrial Port City that Deendayal Port Trust is developing on more than 800 acres could be ideal for Tesla."

Gujarat is on Tesla's radar, according to industry sources, as the state has established itself as a hub for the production of cars and auto parts that Tesla can use. In addition, it is reported that, by having a plant near the port, the company will be able to significantly save on logistics costs.

“Tesla will have huge import and assembling requirements. So, locating the plant next to a port, than in the hinterland, will save a lot on logistics costs,” said S Sittarasu, business development team leader at Deendayal Port Trust.

The potential plant could also serve as an Asian manufacturing hub for Tesla, from where it can enter Gulf markets, including Dubai, with lower logistics costs given the short distance to these locations.

In addition, Tesla can take advantage of the Production-Linked Incentive (PLI) scheme of the Central government, the GST benefits, and other benefits provided by the Gujarat government.

“All these 5-6 parameters boil down to Kandla emerging as the ideal destination for Tesla whether it wants to import, assemble, manufacture or export cars,” Sittarasu said, adding that Deendayal Port will soon make a pitch to the US-based manufacturer to house the project.

Kandla is expected to face competition from the nearby port of Mundra, India's largest port by volume, handled and operated by Adani Ports and Special Economic Zone Ltd (APSEZ). Mundra's advantages, aside from the land availability, are its deep draft and freedom to set rates being a private port. Plus, it will be linked to the Dedicated Freight Corridor (DFC).


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Article edited by @SmokeyShorts, you can follow him on Twitter

About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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