Tesla Opts Out of Indian Manufacturing Despite EV Push
Key Developments in India’s EV Landscape
Getty Images: Tesla showrooms expected in India despite manufacturing decision
In a significant revelation, India’s Heavy Industries Minister HD Kumaraswamy confirmed that Tesla has no current plans for local manufacturing in India, even as the government rolls out new EV production incentives. This marks the first official acknowledgment that India’s efforts to attract Tesla’s manufacturing investment have been unsuccessful.
What’s Happening:
- Showroom Expansion: Tesla will establish two retail locations in India
- Compe***** Interest: Mercedes Benz, Hyundai, Kia, and Skoda-Volkswagen have shown manufacturing interest
- Policy Context: New EV manufacturing scheme guidelines issued Monday
“Tesla - we are not expecting from them,” Minister Kumaraswamy stated bluntly during the policy announcement.
The Backstory: Tesla’s On-Again, Off-Again India Plans
Tesla’s relationship with India has been complex:
- 2019-2022: Negotiations focused on import vs. manufacturing requirements
- 2023: Musk cited “right timing” concerns for Indian market entry
- 2024: High-profile Modi-Musk meeting in Washington DC
- 2025: Import duty reduction for committed manufacturers
Market Realities:
- EV Penetration: Just 3% of India’s passenger vehicle market
- Price Sensitivity: Local EVs cost half Tesla’s base models
- Infrastructure: Charging networks and road conditions remain challenges
Global Context
Tesla faces:
- Chinese Competition: BYD and others gaining market share
- Political Backlash: Sales dropped to 3-year low amid Musk-Trump association
- Manufacturing Strategy: Focused on existing gigafactories in US, China, Germany
India’s EV market leader remains Tata Motors (60% share), followed by MG Motors (22%).
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