Exclusive: Tesla proposes to build a battery storage factory in India

  • Tesla’s thinking goes beyond electric car manufacturer, new car sources to enter India
  • Powerwall Business Proposal in India – Sources
  • Indian Prime Minister Modi has previously been keen on Tesla’s battery storage products

NEW DELHI, Sept 21 (Reuters) – Tesla Inc (TSLA.O) has drawn up plans to manufacture and sell battery storage systems in India and has submitted a proposal to officials seeking incentives to build a factory, two people familiar with the plan said, as Elon Musk continues his push to enter the country.

Tesla has been in talks about setting up a new electric vehicle (EV) factory in India to build a car priced around $24,000 for weeks, with discussions directly overseen by Prime Minister Narendra Modi. However, the payment of renewables has not been reported yet.

In recent meetings in New Delhi, Tesla proposed bolstering the country’s battery storage capabilities through a “Powerwall,” a system that could store energy from solar panels or the grid for use at night or during power outages, the sources said, declining to be identified. It’s confidential.

One of the sources said that although Tesla had sought a number of incentives to set up a battery storage plant, Indian officials reported that these incentives would not be available. But they added that the government could help create a fair business model for the company by offering support to those who buy such products.

The first source said that while both Tesla and the Indian government remain keen on the proposal, and New Delhi continues to review it, it is not certain whether the plan will materialize.

The Powerwall proposal is part of the US company’s plans for a broader presence in India, thinking beyond electric cars, the second source said, adding that Tesla was keen to find residential and industrial customers for its battery storage systems.

“Significant calibration will be needed at the policy level. Tesla’s intention is to acquire the Powerwall business in India,” the source said.

Neither Tesla’s Indian government spokesman nor the Commerce Ministry responded to requests for comment.

India has boosted electricity supplies to towns and villages, but still faces shortages at peak times as demand rises. It relies largely on coal-based power generation because storage technologies are expensive and not yet widespread.

Last year, India faced its worst electricity crisis in more than six years due to coal transportation problems, while delays in adding coal and hydroelectric power have increased the risk of blackouts at night, when solar power is not available.

The country aims to increase non-fossil fuel power generation capacity to 500 gigawatts by 2030, from 186 gigawatts now.


Tesla’s Powerwall is a sleek unit about a meter high and designed to hang in the garage or outside the house.

During a 2015 visit to Tesla’s California campus with Musk, Modi demonstrated the product and later said he enjoyed discussing how battery technology could help farmers.

The Powerwall is aimed at domestic and light commercial use, but Tesla may consider developing larger solutions for industry if the India plan comes to fruition, the second source said, without going into further details.

Indian officials also conveyed that Tesla will have to work on reducing the cost of its battery storage products, the first source said, adding that the government could help open up the market as demand is expected to rise.

Thanks to incentives, the Powerwall costs more than $5,500 in California, with additional costs for solar panels. It is eligible for US federal tax credits and state and local utility incentives for solar and energy storage.

Powerwall users in Houston and Dallas, for the first time, recently agreed to sell their surplus energy to the Texas power grid.

Reporting by Aditya Kalra; (Reporting by Aditi Shah, Sarita Chaganthi Singh and Sudarshan Varadhan – Prepared by Mohammed for the Arabic Bulletin) Editing by Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

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Aditya Kalra is the corporate news editor for Reuters in India, where he oversees business coverage and reporting on some of the world’s largest companies. He joined Reuters in 2008 and in recent years has written stories on challenges and strategies for a wide range of companies – from Amazon, Google and Walmart to Xiaomi, Starbucks and Reliance. He also works extensively on investigative stories that are reported in depth.

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