Tesla is mulling a potential plan to build a battery storage production plant alongside its potential electric vehicle production facility in India, according to a new report.
Tesla has been attempting to come to terms with the Indian government on an electric vehicle production plant for several years, but the talks have gotten more intense over the past few months as the automaker wants to build a factory that would produce a $24,000 car.
CEO Elon Musk has said this year that Tesla will hopefully come to terms with the Indian government this year, with the big bottleneck being the two parties not able to agree on terms regarding import duties that would allow the company to test demand by sending cars from other countries.
These duties price out many customers as, in some cases, they can double the price of a car. However, there has been more movement in the direction of an agreement in terms of this year, and it may not involve importing.
Now, Reuters is reporting that Tesla is planning to take it a step further by building energy storage products in India. Tesla is proposing that it could support India’s battery storage capabilities with the Powerwall, which stores excess energy generated from solar panels.
Tesla and India may not come to terms on import duties, but the plan to bring a wider business model to the country may be the bridge that is needed to make a deal.
One source said that the government wants to help create a fair business model for Tesla as it could offer subsidies for those who purchase energy storage products.
Tesla and the Indian government are still reviewing the proposal, and they are reportedly “keen” on the idea. However, it is still under review.
The source also said:
“Large policy level calibration will be required. Tesla’s intent is to have the Powerwall business in India.”
Tesla could be India’s answer to peak-time shortages and demand surges as the country has boosted supply to towns and villages. India is dependent on coal-based power generation, and its 1.4 billion people depend on non-renewable sources for nearly 58 percent of its energy needs. Non-fossil fuels make up the remaining percentage, with Solar being the biggest contributor, according to the country’s Ministry of Power.
Powerwall would help residents avoid outage issues, and Prime Minister Narendra Modi was extremely interested in how it could help farmers when he met with Tesla brass in 2015.
“Enjoyed discussion on how battery technology can help farmers,” he said. Musk also said he had a productive talk with Modi about solar and how batteries and storage systems can empower rural communities.
“The Prime Minister was very keen to see how we could utilize the battery power ball concept to leapfrog development in India,” Vikas Swarup, Spokesman of the Ministry of External Affairs, said in 2015.
Tesla just recently launched a new version of the Powerwall as well, which offers new and improved specifications that will help keep the lights on longer and avoid outages.