Karnataka Chief Minister BS Yediyurappa announced over the weekend that global EV automaker Tesla was inching closer to setting up a manufacturing plant in Bengaluru, Karnataka. Tesla has since remained tight-lipped about it. Recently itself, the Elon Musk-led outfit set up a subsidiary called Tesla India Motors and Energy Pvt Ltd in Bengaluru in January 2021 which included a paid-up capital of Rs 1 lakh and an authorised capital of Rs 15 lakh.
Tesla’s decision to locate in Karnataka should not come as much of a surprise given the headstart that Karnataka, and its capital Bengaluru, has taken in the EV race compared to other Indian states. Bengaluru is one of the country’s largest research and development hubs, already boasting R&D units of numerous automakers including Mercedes-Benz, General Motors, Continental, Bosch, Delphi, Volvo, Mahindra & Mahindra and Great Wall Motors.
The state already houses many vehicle startups in Bengaluru including Ultraviolette Automotive, Mahindra Electric and Ather Energy. As such, opening an R&D unit in Bengaluru suggests that Tesla too, like several other automakers before it, is seeking to capitalise on the burgeoning engineering and IT talent pool that the city comprises.
Karnataka was the first state in the country to introduce a dedicated EV policy to encourage original equipment manufacturers, component producers and energy suppliers to set up shop in the state.
The state has also realised that providing subsidies to incentivise EV production was not enough. In December last year, the state government sanctioned funds worth a whopping $3.03 billion towards developing EV manufacturing in the state. More recently, Karnataka became the first state to implement a novel battery-swapping network in its capital to assist with clean and efficient last-mile connectivity in the city.
Karnataka’s Electric & Energy Storage Policy, devised in 2017, aims to achieve 100 per cent e-mobility in corporate fleets, school buses (and vans), cab services and auto-rickshaws within the next decade. It also seeks to introduce, at least, 1,000 EV buses into the public transport fleet and set up 112 EV charging stations in Bengaluru. Crucially, it also outlines a pathway towards setting up a venture capital fund geared towards e-mobility startups and the creation of a secondary battery market.
At an investors’ meet back in February 2020, the state has received proposals for investments amounting to Rs 72,000 crore.
