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Elon Musk’s Home Country Would Really Love Some Tesla Investment

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Elon Musk, CEO of Tesla Motors, attends an environmental conference at Astrup Fearnley Museum in Oslo, Norway on April 21, 2016. Photograph by Heiko Junge — AFP/Getty Images

The South African government is urging Tesla (TSLA) to set up manufacturing facilities in the country.

The country’s trade department said Sunday that Tesla had “expressed the interest of investing in South Africa” during a Washington breakfast session, where trade and industry minister Rob Davies addressed potential investors.

Davies “encouraged Tesla Company to work with his department and the South African government to explore the possibility of setting up the manufacturing of Tesla products in South Africa,” a statement read.

Tesla chief Elon Musk was born and grew up in South Africa. However, his main company’s steps into the country have been tentative.

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It was only this year that Tesla announced it would be releasing one of its electric cars—the Model 3—in South Africa. But that’s not likely to be its biggest business in the country.

It is rather Tesla’s grid battery, the PowerWall, that is likely to make a serious impact in a country that has an underfunded electricity grid, a lot of sun for solar energy, and many businesses and even homes that are keen to protect themselves from occasional blackouts.

The first PowerWall was installed in South Africa in April. Italian utility giant Enel is using South Africa as a testbed for its PowerWall-based home-power kit.

The company has also been hiring staff in South Africa, suggesting that it is serious about the market.

However, selling and installing PowerWalls is one thing, and making them is another.

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At the start of the year, South African media reported that Tesla might set up one of its battery-producing “gigafactories” in the Western Cape province. However, the company subsequently denied that it had plans to do so.

In Sunday’s statement, Davies claimed South Africa’s renewable energy subsidy program was one of the best in the world, and that energy storage was the “main challenge” for the sector.

He also highlighted South Africa’s electric-car subsidies and, according to the statement, said that “government understands that electric vehicles are where things are going including hybrids and fuel cells.”

Tesla is currently in the controversial process of buying another one of Musk’s energy companies, SolarCity. Musk recently said the combined entity would make solar roofs with built-in PowerWall batteries.