Tesla Not Interested in India Car Manufacturing Unit says Union Minister

Tesla is not planning to manufacture electric vehicles in India, Union Minister of Heavy Industries HD Kumaraswamy said yesterday, on June 2, 2025. The company is currently only looking to open showrooms in the country and sell imported cars.

Attracting Global Automakers

Earlier this year, the Indian government introduced a policy to encourage global automakers to set up EV manufacturing units in India. The scheme allows companies to import a limited number of electric vehicles at a reduced duty of 15%, down from the current 70%, if they invest at least ₹4,150 crore (approximately $486 million) and start production within three years.

The policy also includes conditions around local sourcing. It is officially titled the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI). Applications for the scheme will open soon and can be submitted until March 15, 2026.

Tesla Skips Follow-Up Discussions

Tesla was present during the 1st round of stakeholder discussions on the policy but did not participate in later rounds. The minister stated that Tesla has not expressed intent to manufacture locally and is expected to focus only on retail operations for now.

Read more: Tesla Secures First India Showroom in Mumbai’s BKC

Other Automakers Show Interest

According to news reports, Tesla, several international companies including Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia, have expressed interest in the scheme. These companies are in talks with the government to explore the possibility of setting up local production facilities under the new policy.

Players Already Investing

Indian automakers like Tata Motors and Mahindra & Mahindra have already committed significant resources to EV production. They hold a majority share in the domestic EV market and have pushed back against lowering import duties for foreign brands.

Current EV Sales

Electric vehicles made up less than 3% of total passenger car sales in India in 2024. Out of 4.3 million cars sold, around 1.13 lakh were electric. The government aims to push EV adoption to 30% by 2030.

Conclusion

Tesla’s manufacturing plans remain on hold. Other global firms are currently evaluating their entry under India’s new EV policy.

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