Tesla, which saw its global vehicle deliveries decline in the first quarter for the first time in nearly four years, is stepping up efforts to expand into new markets.
It wants to begin with a showroom of 3,000 to 5,000 square feet (280-465 square metres) as well as a service hub in each city, said one of the people familiar with the plans.
The automaker has begun production of right-hand drive cars at its plant in Germany for export to India, separate sources have said.
India last month cut electric vehicle import taxes to 15% from as much as 100% for automakers that invest at least USD 500 million and set up a factory.
Tesla Chief Executive Elon Musk is expected to make an investment announcement and meet Prime Minister Narendra Modi during a two-day visit to India from Sunday. Musk and Modi last met in New York in June.
Tesla executives started looking at locations last month and have held talks with several real estate developers as they look at potential high street and mall sites, one of the sources said. The person added that the company is keen to begin construction soon so that the showrooms can open in 2024.
The sources declined to be identified as discussions were confidential. Tesla did not immediately respond to a request for comment.
Tesla is grappling with slower growth for electric vehicles in both its main markets of the United States and China. Reuters reported this month that Tesla has cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth.
Demand for electric cars in India - the world's third-largest auto market - is expected to rapidly climb. EVs made up just 2% of India's total car sales in 2023, but the government has said it wants 30% of all new car sales to be electric from 2030.
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