Tesla, US based global EV (Electric vehicle) is not longer interested in manufacturing electric vehicles in India – confirmed by Union Heavy Industry Minister H. D. Kumaraswamy on Monday, 2nd June 2025.
The Minister has also confirmed that Tesla is only interested in setting up showrooms in India for now.
Earlier US President has expressed concern saying if Tesla sets up manufacturing plants in India to avoid tariff then it would be unfair to US. Elon Musk, Tesla CEO who owns about 12.8% stake in Tesla is considered very close to US President Donald Trump and is not expected to do anything that will undermine the import tariff policy.
Also, with the current round of discussions in the advance stages it is expected that India will reduce import tariff on US exported items to India including the automobiles. This could benefit Tesla to just export EV cars manufactured in US to India. However, we need to see what bilateral tariff deal will be agreed upon by both the nations.
Analysts also see other factors contributing to Tesla not showing interest in Scheme to Promote Manufacturing of Electric Passenger Cars in India that was announced in March last year.
- Still low demand of EV in India. Cost is one of the major factor for price conscious Indian consumers.
- EV infrastructure is still in nascent stages of development.
- Tesla is already facing a tuff competition globally especially from Chinese EVs which has led to Tesla EV cars already declining since last 2 years.
However, it is expected that Tesla will consider manufacturing in India in future. As confirmed by Elon Musk’s father Errol Musk “India is one of the most important places in the world. There has to be a Tesla plant in India.” He also added that his son and PM Narender Modi will figure out something to bring Tesla manufacturing in India.
Other EV manufacturers showing interest in Make In India EV Scheme
Other global EV manufacturers like Mercedes, Skoda, Volkswagen and Kia have already shown interest in Scheme to Promote Manufacturing of Electric Passenger Cars in India.
