Tesla is looking to set up a big factory in India and is sending over a team to scout for possible locations, reported The Financial Times.

The team is expected to arrive this month to look for the factory's location. The Elon Musk owned electric vehicle (EV) manufacturer is planning to spend between $2 billion and $3 billion on the factory.

This development comes at a time when there's not as much demand for electric cars, and there's a lot of competition. Due to this, Tesla didn't sell as many cars as people thought they would in the first three months of this year.

Last month, India decided to lower the taxes on some electric cars made by companies that agree to invest at least Rs 3,700 crore and start making cars in India within three years.

Tesla has been trying to get into the Indian market for a while now. But the Indian government said they wanted Tesla to make cars in India, not just sell them here.

The EV manufacturer has been talking to Indian government officials for about a year now. And last June, Musk even met with the Prime Minister Narendra Modi.

In July last year, Tesla said they wanted to build a factory in India to make a car that costs around Rs 17,30,000. They also asked for taxes to be lower on more expensive models that they want to sell in India, according to a report from Reuters.

Some experts think that if Tesla starts selling cars in India, it could encourage other companies to invest in electric cars too. And this could be good for companies in India that make parts for cars.