Modi Govt Doesn’t Expect Tesla to Make Cars in India

Following the announcement of the new electric vehicle policy in 2024, several global carmakers have shown interest in manufacturing in India. However, Elon Musk-led Tesla is not among them, according to Heavy Industries Minister H.D. Kumaraswamy.

Speaking at a press conference on Monday, Kumaraswamy said, “As far as we know, Tesla plans to open only two showrooms in India to sell cars.”

“We don’t expect Tesla to manufacture in India,” the ministry added, as quoted by news agency PTI.

The government has released the final guidelines for its flagship EV policy, aimed at attracting global automakers to set up manufacturing operations in India. However, Tesla Inc. is unlikely to participate.

Announced in March 2024, the policy offers a reduced import duty of 15% on electric vehicles priced at $35,000 or more—provided the manufacturer invests at least $500 million to establish a local factory within three years. Companies will be allowed to import up to 8,000 EVs per year at this lower duty rate, though only for a limited period.

“Germany’s Mercedes-Benz and Volkswagen, along with South Korea’s Hyundai, have already expressed interest,” Kumaraswamy noted.

Govt’s Policy Easing

India’s 2024 EV policy is part of a broader effort to attract global players like Tesla, which has long criticised the country’s steep import duties—sometimes as high as 100% of the vehicle’s price. According to Bloomberg, applications under the new policy could open as early as this month and remain open until 15 March next year.

While Tesla has recently made moves to establish a presence in India—including finalising showroom space and listing over two dozen job openings—Kumaraswamy said the company currently has no plans to begin manufacturing in the country.

In February, Reuters reported that Tesla had secured a showroom location in Mumbai’s upscale Maker Maxity complex in the Bandra Kurla area, at a monthly rent of around ₹32 lakh. The five-year lease, starting on 16 February 2025, covers a 4,003-square-foot (372-square-metre) space—roughly the size of a basketball court—with first-year rent totalling about $446,000.

That same month, US President Donald Trump said any move by Tesla to set up a factory in India would be “very unfair.”