State Highlights Port Connectivity, EV Ecosystem to Secure Investment
Andhra Pradesh has intensified its efforts to bring Elon Musk’s Tesla to set up an electric vehicle (EV) manufacturing unit in the state, following Prime Minister Narendra Modi’s recent meeting with Musk and Tesla’s ongoing hiring spree in India.
According to The Economic Times, the Andhra Pradesh Economic Development Board (EDB) has renewed talks with Tesla, positioning the state as a strategic investment destination due to its port connectivity, availability of land, and growing EV ecosystem.
Discussions with Tesla were first initiated in October 2024, when state minister Nara Lokesh met Tesla’s CFO Vaibhav Taneja during a visit to the United States. The state government has since ramped up efforts to differentiate itself from other Indian states vying for Tesla’s investment.
Attractive Incentives to Lure Tesla
Andhra Pradesh is offering a comprehensive package of incentives, including:
- Ready land parcels for immediate setup
- Port connectivity, allowing for easier imports and exports
- Established auto and battery manufacturing ecosystem in southern Andhra Pradesh
Initially, Tesla is expected to focus on importing cars into India before gradually setting up a full-fledged EV manufacturing facility.
“The port access will help the company in importing cars. Also, if it sets up a manufacturing plant in southern Andhra Pradesh, there is a readymade ecosystem of auto companies, battery manufacturers, and ancillary suppliers here,” a source told The Economic Times.
South India: A Key EV Market
The state is also emphasizing South India’s dominance in EV adoption, stating that the region accounts for nearly 60% of India’s four-wheeler EV sales, spread across:
- Kerala
- Telangana
- Tamil Nadu
- Karnataka
This makes Andhra Pradesh a strategic location for Tesla, with access to a large and rapidly growing market for electric vehicles.
Previous Attempts to Attract Tesla
This is not Andhra Pradesh’s first attempt to bring Tesla on board.
- In 2017, then-Chief Minister N. Chandrababu Naidu signed a memorandum of understanding (MoU) with Tesla.
- Musk had also promised to provide technological expertise for two solar energy storage units in Rayalaseema.
With Tesla now actively hiring in India and looking at market entry strategies, Andhra Pradesh is making a strong renewed pitch to be the preferred destination for Tesla’s India expansion.
What This Means for India’s EV Industry
- Tesla’s entry into Andhra Pradesh could significantly boost India’s EV manufacturing sector, attracting further investments from global automakers and battery manufacturers.
- The availability of a robust supply chain, port infrastructure, and market demand strengthens the state’s case as an ideal choice for Tesla.
- Competing states like Maharashtra, Gujarat, and Tamil Nadu are also in talks with Tesla, making the final decision highly anticipated.
As India emerges as a key global player in electric mobility, Tesla’s investment could be a game-changer for the country’s EV ecosystem, local manufacturing, and supply chain development.
