The Union government has announced a liberal EV policy for all potential investors, but during Tesla CEO Elon Musk’s upcoming visit to India, states may offer incentives like concessional land rates to attract foreign investments, according to two officials.

Competition among states to host Tesla’s proposed manufacturing unit is underway, with two industrial states in western India and two in the South vying for the opportunity. Gujarat, Maharashtra, and Tamil Nadu are being considered as potential sites for the plant due to their coastal locations with ports.

Tesla has initiated the production of right-hand drive cars for the Indian market at its Berlin factory and aims to introduce them on Indian roads later this year. The company will send a team to India in April to scout locations for its manufacturing plans targeting the wider developing world.

Elon Musk's tweet about meeting Prime Minister @NarendraModi indicates a potential resolution of issues regarding the facility site and regulatory approvals during his visit.

The proactive approach of states may influence Tesla's decision-making process, but factors like production costs, law and order, and infrastructure will also play a crucial role. Gujarat, Maharashtra, Telangana, and Tamil Nadu are expected to compete for Tesla's investment, with an initial investment of $2-3 billion to set up the plant in India. The EV policy released last month addresses Tesla's request for concessional duty on EV imports during the initial phase.