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Tesla has plans for India, but they don’t involve cars

Indian prime minister Narendra Modi’s visit to Tesla Motors during his tour of Silicon Valley sparked conversation about Tesla opening shop in the country, but it looks like car manufacturing isn’t on the cards. Instead, Tesla’s second Gigafactory could be located in India, to respond to increasing local demand expected in the long term.

Replying to a tweet about opening a factory in India, Musk said “A Gigafactory in India would probably make sense in the long term.” He did not mention whether an Indian Gigafactory was part of his talks with Modi, though batteries were in the discussion.

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Tesla Motors already receives bulk battery packs from its manufacturing partners in India. Setting up its own facility in the country would save the company time and money, as it continues to expand its car manufacturing plant in China.

Modi has called for more investment into India and for foreign businesses to establish operations in the country. Tesla’s Gigafactory would be right up Modi’s alley; as the prime minister pushes for more renewable energy construction. Modi set an ambitious target of 100 gigawatts of solar power by 2022.

The first Gigafactory in Nevada has a completion date of 2017, and Tesla claims it is 40 percent complete. It will be used to develop most of the batteries that go inside the Model S, Model X, and Model 3 — the last of these scheduled to launch in the same year.

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But as Tesla continues to flesh out its business globally, it will need more than one Gigafactory. Musk claimed in an interview that Tesla would need 20 Gigafactories if it were to become a self-reliant mainstream car manufacturer.

The Gigafactory would also be able to supply other electric car manufacturers, adding another potential market for Tesla. The company’s Powerwall and Powerpack home batteries will most likely come to India before the Model S or Model X in however, due to the large import duties on cars in the country.