Elon Musk’s Tesla is actively scouting locations in India for setting up a completely knocked-down (CKD) assembly unit, even as opposition from US President Donald Trump looms over its plans to manufacture electric vehicles in the country.

According to sources, Tesla has been in discussions with the government of Andhra Pradesh, which is offering pre-acquired land options in various districts including Nellore, Sri City in Tirupati, and close to the Kia manufacturing cluster in Anantapur district. These locations are being considered due to their strategic advantages, including proximity to key infrastructure and automotive hubs in India.

While Andhra Pradesh emerges as a leading contender, Maharashtra and Gujarat were previously under consideration as potential sites for Tesla’s CKD assembly unit. However, sources suggest that Tesla is hesitant to move forward with land acquisition and rehabilitation processes, particularly in those states, where such procedures can be more complex and time-consuming.

The move comes despite earlier resistance from US President Donald Trump, who voiced concerns over Tesla’s plans for electric vehicle production in India. The Trump administration has expressed opposition to initiatives that could potentially disrupt trade relations or have an adverse impact on the US economy. However, Tesla’s commitment to the Indian market, especially with its growing demand for electric vehicles, appears to outweigh political barriers, as it aims to tap into the rapidly expanding automotive sector in the country.

India presents a huge opportunity for Tesla as the government is keen on promoting electric vehicles to reduce carbon emissions and reliance on fossil fuels. However, Tesla’s push into India has faced numerous hurdles, including regulatory delays, political resistance, and local competition from Indian manufacturers.

Tesla’s decision to set up a CKD unit in India would mark a significant step toward localizing production and making electric vehicles more affordable and accessible for Indian consumers. The company has also been looking at ways to reduce import duties on electric vehicles, which remain high in India, further hindering market growth.

Despite these challenges, Tesla’s strategic push to build a manufacturing base in India underscores its long-term vision to become a global leader in electric mobility. As Tesla continues its negotiations with various state governments, the focus now is on finalizing the ideal location for its assembly plant, which will play a crucial role in the company’s plans for expanding its footprint in Asia.