Indian and Southeast Asian leaders are appealing directly to Tesla CEO Elon Musk to invest in their countries as the electric-vehicle maker weighs options for curbing its dependence on the Chinese market.
Indian Prime Minister Narendra Modi met with Musk in New York last June, the month after officials from Tesla and the Indian government reportedly talked about the automaker potentially entering the country.
At the June meeting, Modi invited Musk to “explore opportunities in India for investments in electric mobility and rapidly expanding commercial space sector,” according to the Indian Ministry of External Affairs.
“I’m confident that Tesla will be in India,” Musk said afterward.
Indian Commerce Minister Piyush Goyal also visited a Tesla plant in California this past November.
Tesla’s plans in India have been a hot topic since it set up a local unit in January 2021. India overtook Japan to become the world’s third-largest auto market by new-vehicle sales in 2022 and defended its position in 2023.
Modi’s government is working to bolster the manufacturing sector through the Make in India campaign. Job creation is a critical challenge in India in light of its growing population, and a strong EV industry could boost employment while mitigating pollution and reducing reliance on imported crude oil.
Others in Asia are also rolling out the red carpet for Tesla.
Indonesian President Joko Widodo in May 2022 visited Texas, where he urged Musk to build an EV plant in the Southeast Asian country.
Indonesia is home to rich reserves of nickel and other materials used in EV batteries. Musk reportedly expressed an interest in working closely with Indonesia, acknowledging the market’s significant potential.
Malaysian Prime Minister Anwar Ibrahim discussed potential investments and other topics with Musk online in July 2023.
Thai Prime Minister Srettha Thavisin met with Musk on the sidelines of the United Nations General Assembly that September. He later said he expected at least $5 billion in total investments from Tesla and other U.S. corporations, sparking speculation that he had made some progress in his talks with Musk.
Tesla executives visited Thailand in late November.
These pilgrimages to meet with Musk come as interest in decarbonization spreads from markets like the U.S., Europe and China to India and Southeast Asia.
“Tesla is a pioneer in EVs,” said Hirotaka Uchida, a partner at consultancy Arthur D. Little. “It has a strong brand image and would provide a greater boost for these countries’ appeal than if they were to secure an investment by China’s BYD.”
Tesla is also looking to make inroads into India and Southeast Asia as the U.S. works to decouple EV supply chains from China. Tesla can now produce around 950,000 vehicles a year, or around 40% of its global output, at its Gigafactory Shanghai. The facility serves as a hub for exports to Thailand and Japan as well.
Tesla also builds passenger EVs at two auto factories in the U.S. and one near Berlin. In 2023, it announced plans to construct one in Mexico. A fifth auto plant, in India or Southeast Asia, could help further balance out its supply chain.
Competition from Chinese EV makers like BYD is another factor. BYD outpaces Tesla in global sales of EVs and plug-in hybrid vehicles, and beat Tesla in EV sales alone in the October-December quarter.
Such Chinese players as BYD and Great Wall Motor control around 80% of Thailand’s EV market. BYD led with around a 40% share in 2023, nearly quadruple Tesla’s 11% or so, according to automotive news outlet Autolife Thailand. In India, Tesla is behind rivals like locally based Tata Motors.
Some Indian media reporting has Tesla possibly making a final decision as early as this year to invest in India, building a plant with the capacity to produce up to an annual 500,000 vehicles.
“In India and Southeast Asia, EVs are a critical issue that could affect national strategy,” Uchida said. “It’s hard to say which country is at an advantage based on the maturity of their markets and industrial bases alone.”
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