Elon Musk’s Tesla has proposed setting up a battery storage factory in India, but the company has faced roadblocks in its negotiations with the Indian government.
Tesla has been in talks with Indian officials for weeks about setting up a new electric vehicle (EV) factory in India. However, the company has also proposed supporting the country’s battery storage capabilities with its “Powerwall”, a system that can store power from solar panels or the grid for use at night or during outages.
In recent meetings in New Delhi, Tesla proposed a number of incentives to set up a battery storage factory, but Indian officials conveyed that these would not be available. However, they added that the government could help create a fair business model for the company by offering subsidies to those purchasing such products.
While both Tesla and the Indian government remain keen on the proposal, it is not certain if the plan will be realised.
Tesla’s Powerwall proposal is part of the US company’s plans for a broader presence in India, thinking beyond EVs. The company is keen to find residential as well as industrial customers for its battery storage systems.
India has boosted electricity supplies to towns and villages but still faces peak-time shortages as demand surges. It is largely dependent on coal-based power generation as storage technologies are expensive and not yet widespread.
Tesla’s Powerwall is a sleek unit around a meter high designed to be hung in a garage or outside a house. During a 2015 visit to Tesla’s California campus accompanied by Musk, Modi reviewed the product and later said he had enjoyed discussing how battery technology could help farmers.
Indian officials have also conveyed that Tesla will have to work on reducing the cost of its battery storage products. With incentives, Powerwall costs more than $5,500 in California, with additional costs for solar panels. It is eligible for U.S. federal tax credits and local state and utility incentives for solar and energy storage.
Powerwall users in Houston and Dallas, in a first, recently agreed to sell their surplus power back to the Texas electric grid.
Tesla’s proposal to build a battery storage factory in India is a significant development, as it could help to accelerate the adoption of renewable energy in the country. India is one of the world’s fastest-growing economies, and its energy demand is expected to increase significantly in the coming years. Battery storage can help to integrate renewable energy sources into the grid and provide backup power during outages.
However, Tesla faces a number of challenges in its efforts to enter the Indian market. The Indian government is reluctant to provide financial incentives to foreign companies, and the cost of Tesla’s Powerwall is still relatively high. Tesla will need to reduce the cost of its products and work with the Indian government to develop a sustainable business model in order to succeed in the Indian market.
Despite the challenges, Tesla’s proposal is a sign of the growing interest in battery storage in India. The Indian government is targeting an increase in non-fossil fuel power capacity to 500 GW by 2030, from 186 GW now. Battery storage will play a key role in achieving this goal.
