American electric car and clean energy company Tesla is exploring an alliance with the power generation unit of Indian conglomerate Tata Sons, Tata Power, to set up charging infrastructure for electric vehicles in the country, according to sources.
Following the report shares of Tata Power rose 5.5 percent to their best closing level since June 2014, which comes as the billionaire Elon Musk-owned electric-car maker gears up for an India launch later this year with plans to import and sell its Model 3 electric sedan.
Tesla will set up an electric-car manufacturing unit in the southern Indian state of Karnataka opening up a new growth opportunity after setting up production in China, according to a government document.
The talks between Tata Power and Tesla are in the initial stages and no arrangements have been finalized yet, the report said. Tata Power’s electric vehicle charging business constantly explores growth opportunities but has not finalized any new agreements, the company said in a statement to stock exchanges. It also said the report was “factually incorrect”, but did not elaborate.
Tesla in India
In January, the US electric-car maker incorporatedTesla Motors India and Energy Private Ltd with its registered office in Karnataka’s Bengaluru, a hub for global technology companies.
India’s transport minister Nitin Gadkari had said in December last year that the electric carmaker would start with sales and then might look at assembly and manufacturing in the country. Before that Tesla chief executive Elon Musk had tweeted several times in recent years about an impending foray into India.
Tesla’s foray has been predicted to be challenging as the country hasn’t yet rolled out facilities for electric vehicles like neighbor China, where Tesla set up its first factory outside of the US and now dominates sales of premium EVs. EVs account for about 5 percent of China’s annual car sales, according to data, compared to less than 1 percent in India.
“Considering the price of a Tesla, Elon Musk probably won’t be able to sell an EV to most of the population in emerging economies,” experts said at the time. “However, looking at the size of the population and the potential for economic growth, Tesla will probably target a fast-growing group of affluent individuals that, in absolute terms, compares quite favorably to what we see in many developed countries.
Tata Motors, the car making unit of Tata Sons, last week denied any tie-up with Tesla, after media reports suggested the two companies were discussing a partnership.
