Tesla not interested in manufacturing EVs in India, says Union minister

Tesla is likely preparing for a market launch in India, although local production isn't part of its initial plans

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Tesla is not expected to manufacture electric vehicles in India in the near future, Heavy Industries Minister H D Kumaraswamy said on Monday, as reported by ANI. While Tesla is preparing for a market launch, local production is not part of its immediate plans.

 

Despite finalising a showroom space in Mumbai’s Bandra Kurla Complex and hiring over two dozen personnel in India, including store managers and service staff, Tesla is reportedly not considering local manufacturing at this stage. The company has begun the process of certification and homologation to sell its EVs in India and is expected to roll out its first car in the market within the next two to three months. 

 

This comes despite the country’s recent efforts to woo global automakers through a generous electric vehicle (EV) policy. 

 

India had introduced a flagship EV policy in March 2024 to attract major players like Tesla, offering reduced import duties in exchange for manufacturing commitments. Under the policy, companies can import up to 8,000 EVs annually at a significantly lowered duty of 15 per cent, provided they invest at least ₹4,150 crore (approximately $500 million) to establish local production within three years. Applications for the scheme are expected to open soon and remain active until March 15, 2026.

 

The policy aims to position India, the world’s third-largest car market, as a key destination for EV investments. While global EV demand is tapering off, India continues to show interest. However, the Indian government has recently tightened eligibility criteria under the scheme, introducing a minimum revenue requirement of ₹5,000 crore in the fourth year and ₹7,500 crore in the fifth. Companies failing to meet these targets may face penalties of up to 3 per cent on the revenue shortfall.

 

Tesla is currently facing several global challenges. In the first quarter of 2025, the company recorded a 13 per cent drop in global vehicle deliveries and a 71 per cent plunge in net profit, its first annual delivery decline in over a decade.