Tesla Motors is set to explore potential sites in India this month for its electric car manufacturing plant, estimated to cost $2 billion to $3 billion, according to a report by The Financial Times (FT).

The move marks a significant step towards local production after New Delhi recently reduced tariffs on imported electric vehicles (EVs) for companies willing to manufacture within the country.

Tesla had earlier advocated for tariff cuts in EV manufacturing, setting this as a prerequisite for investment.

The company plans to dispatch a team from the United States by late April to assess potential locations with established automotive hubs, such as Maharashtra, Gujarat, and Tamil Nadu.

Although Haryana also houses some automakers, Tesla's primary focus is reportedly on states with port facilities, facilitating car exports.

The factory aims to achieve a production capacity of up to 500,000 cars annually at full capacity, with potential plans for a battery plant akin to Tesla's "gigafactories" in other locations.