The electric carmaker’s CEO said he would probably pick a location for a new factory by the end of this year and expressed interest in India. Tesla Chief Executive Officer Elon Musk hinted at India as a potential location for a new factory, as he said he would probably pick a location by the end of this year.

At an event hosted by the Wall Street Journal on Tuesday, Musk was asked if India was interesting, to which he replied, “Absolutely”. Tesla has been eyeing the Indian market for several years now, but has faced challenges such as high import duties, lack of infrastructure and policy uncertainty. Tesla established two local subsidiaries in India earlier this year, but has been lobbying the government to lower the import taxes on electric vehicles, which can be as high as 100%.

The government, on the other hand, has asked Tesla to commit to manufacturing or assembling cars domestically before seeking tax breaks. However, Tesla’s stance may have softened recently, as its executives travelled to India last week and proposed setting up a factory to produce EVs for both domestic and export markets, Reuters reported. Rajeev Chandrasekhar, India’s deputy minister for electronics and information technology, told Reuters that Tesla is “serious” about its plans to establish a manufacturing base in India.

He also said that Tesla may be interested in more than just car manufacturing, noting that “you don’t talk about cars alone”. India is not the only country vying for Tesla’s attention. Indonesia, South Korea and Mexico are also among the contenders for hosting a new Tesla factory. Tesla currently operates several so-called Gigafactories in the U.S., and two outside of the U.S., near Berlin, Germany, and Shanghai, China. The Shanghai Gigafactory is a critical part of Tesla’s supply chain, making over half of its delivered cars in 2022.

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