Will Tesla's First India Manufacturing Plant Rise In Tamil Nadu's Hosur Or Thoothukudi?

The Tamil Nadu state government is ramping up efforts to bring American electric vehicle giant Tesla's manufacturing plant to the state. The move comes amid Tesla's increasing interest in investing in India following Prime Minister Narendra Modi's meeting with Elon Musk during his recent US visit.

Tesla's Sales-Service Center In Mumbai

Tesla has already announced plans to set up a sales and service center in Mumbai, Maharashtra, and is now exploring options to establish its electric car manufacturing plant in India. However, the final location is yet to be officially confirmed.

Tamil Nadu Competing With AP, Maharashtra

As per a report in Dinakaran, Tamil Nadu is facing stiff competition from Andhra Pradesh and Maharashtra, both of which are offering attractive incentives, including land and electricity tax exemptions, to woo Tesla. In response, Tamil Nadu's industry department has formed a dedicated team to engage with Tesla representatives. Discussions are ongoing, with potential sites in Thoothukudi and Hosur under consideration.

An industry official told the Tamil daily that the team is in direct touch with Tesla and hoping for a positive outcome.

Tamil Nadu Becoming EV Capital of India

In 2024, Tamil Nadu has already secured massive EV investment commitments, including Rs 9,000 crore from Tata Motors-JLR, up to $2 billion from VinFast, Rs 3,000 crore from Royal Enfield, and Rs 2,000 crore from Hyundai and Stellantis. These investments will significantly bolster the state's EV manufacturing capabilities.

Tamil Nadu has already contributed to 40% of India's EV production, with over four lakh of the ten lakh EVs sold last year being manufactured in the state. In the two-wheeler segment, the state leads the nation, with 68% of all EV two-wheelers produced locally. Top manufacturers such as Ola Electric, TVS Motor, and Ather Energy, which are among the top five EV makers in the country, have set up their bases in Tamil Nadu.

VinFast recently broke ground on its first Indian factory in Thoothukudi, just 50 days after signing a Memorandum of Understanding with the Tamil Nadu government. The company plans to invest $500 million in the first phase, creating around 10,000 local jobs. The project, spanning 380 acres, is part of the SIPCOT industrial estate in Silanatham village.

Also, Tata Motors is investing ₹9,000 crore in its vehicle manufacturing plant in the Ranipet district, which is expected to generate over 5,000 jobs.

Additionally, the Tamil Nadu government is working to revive operations at Ford's defunct car factory, which has been idle for two years.