Telangana Chief Minister Revanth Reddy, the first Congress CM of the state, is actively working to position Telangana as a key player in the electric vehicle (EV) industry. Reddy recently revealed during a gathering at the Indian High Commission in London that the state is courting major EV manufacturers, including Tesla and BYD, to establish their production units.
Strategic Multi Crore Deals
In a bid to bolster the state’s economic landscape, CM Reddy has secured significant deals with major conglomerates such as the Adani Group, JSW, Tata Technologies, BL Agro, and others. The World Economic Forum has also chosen Hyderabad as the location for its Centre for Fourth Industrial Revolution (C4IR), further enhancing the state’s global standing.
BYD’s Setback and Tesla’s Ongoing Interest
Despite the Centre rejecting Chinese EV giant BYD’s proposal to establish a manufacturing unit in Hyderabad in July 2023, Telangana remains undeterred. BYD, known as the world’s largest EV maker by sales, had proposed a $1 billion unit in collaboration with Megha Engineering and Infrastructures. The rejection, citing security concerns, has prompted Telangana to refocus its efforts on luring Tesla, which has been expressing interest in entering India for over two years.
Tesla’s Prospective Investment
Tesla, currently in advanced discussions, is contemplating a substantial investment of approximately $30 billion over the next five years in India. This investment would encompass the establishment of a manufacturing plant, development of a comprehensive battery ecosystem, and support for related industries. Tesla has also requested reduced import taxes for electric cars, seeking favourable terms to compete in the Indian luxury car market.
EV Policy and Tesla’s Strategic Moves
If the new EV policy of the Centre provides the desired rebate on existing import duties for foreign-made EVs, Tesla plans to introduce a limited range of its standard models in the luxury car market. Simultaneously, Tesla aims to commence the development and testing of a charging ecosystem. There are indications that Tesla might consider investing in a local factory to produce its first compact car within the next two years, with the facility expected to be fully operational within three years.
Potential Investment Figures
In case the negotiations bear fruit, sources close to Tesla suggest a significant investment scenario. The company is purportedly looking at a $3 billion investment in the manufacturing plant, with additional investments totaling $10 billion from partners in its manufacturing ecosystem. Simultaneously, an extra $5 billion investment in batteries is anticipated to grow to $15 billion, resulting in a substantial total investment of $30 billion.
Government Initiatives and EV30@2030 Campaign
The Chief Minister’s ambitious plans align with the EV30@2030 campaign initiated by the Ministry of Road Transport and Highways. The campaign aims to achieve specific EV adoption targets, including 30% of newly registered private cars, 40% of buses, 70% of commercial cars, and 80% of 2-wheelers and 3-wheelers as electric vehicles by 2030.
Telangana’s proactive approach under CM Revanth Reddy reflects a strategic vision to make the state a prominent hub for electric vehicle manufacturing. With ongoing efforts to attract major players like Tesla and capitalise on the evolving EV landscape, Telangana is poised to play a pivotal role in shaping India’s electric future.
