Tesla Inc will set up an electric car manufacturing unit in Karnataka, said chief minister BS Yediyurappa in a statement. The statement was a part of release listing benefits for the southern state under the Union Budget 2021. “American firm Tesla will open its electric car manufacturing unit in Karnataka,” Yediyurappa said in a statement in Kannada.

In January, billionaire Elon Musk’s company set up a subsidiary named Tesla India Motors and Energy Pvt. Ltd in Bengaluru. It registered office at Lavelle Road, a business district in Bengaluru, with a paid-up capital of 1 lakh and an authorized capital of 15 lakh, a Registrar of Companies (RoC) filing showed. The filing mentioned the Indian unit has three directors including David Feinstein, who is currently a senior executive at Tesla, according to his LinkedIn profile.

Elon Musk, founder and chief executive officer of the Cupertino-based Tesla, said earlier US electric carmaker will make a foray into India in 2021.“Next year for sure,” Musk said on Twitter in reply to a post with a photograph of a T-shirt with the message: “India wants Tesla” in October 2020. “Thanks for waiting,” Musk said.

The move comes as Prime Minister Narendra Modi is promoting the production and use of electric vehicles to reduce the country’s oil dependence and cut down on pollution. The state had earlier said Tesla would open a research and development (R&D) centre in Bengaluru, according to reports.

“We have been interacting with Tesla for the last few months and it is happy news that they have decided to incorporate their company here. We have impressed upon them that Bengaluru is not only the technology capital but also the aerospace and space capital. For any kind of technology collaboration, it has the right kind of talent pool,” Gaurav Gupta, principal secretary, commerce & industries of Karnataka earlier told Mint.

Union road transport and highways minister Nitin Gadkari said in December that Tesla will begin its operations in India early this year with sales, and later venture into assembly and manufacturing of electric cars.

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