Elon Musk’s Tesla is reportedly not interested in setting up manufacturing facilities in India, despite the government’s push to attract EV giants through its new electric vehicle policy. According to Heavy Industries Minister HD Kumaraswamy, Tesla only wants to sell imported cars via showrooms rather than produce them locally.
“Tesla only wants to open showrooms and sell imported cars,” Kumaraswamy said, as quoted by ET Now. He added that while Tesla stays on the sidelines, global carmakers like Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia have expressed interest in manufacturing electric vehicles under India’s new policy framework.
The government’s electric vehicle manufacturing scheme, called the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), is set to invite applications soon. The scheme offers significant tax breaks—slashing import duty to 15% from 70%—for companies investing at least $486 million in domestic EV production.
While Tesla has finalized showroom space and listed multiple job openings in India, its reluctance to manufacture locally is seen as a missed opportunity. Musk has previously criticized India’s steep import duties, calling them a roadblock for Tesla’s expansion in the country.
India remains a highly price-sensitive market. Even Tesla’s most affordable Model 3, priced at $42,490 (about ₹37 lakh), lands in the luxury bracket here. Unless Tesla offers a competitively priced model—like the long-rumored $24,000 ‘Model 2’—the brand’s impact may remain limited.
Experts believe India’s EV sector is gaining momentum, with electric passenger car sales jumping from 5,000 units in 2020 to over 113,000 in 2024, though overall penetration remains under 3%. Tesla could tap into this growing premium segment if it aligns with local manufacturing goals and pricing expectations.