India’s Heavy Industries Minister HD Kumaraswamy has revealed that Tesla, the electric vehicle (EV) giant led by Elon Musk, is not interested in setting up manufacturing operations in the country. The announcement came as the Indian government rolled out new guidelines aimed at boosting domestic EV production.
This marks the first official acknowledgment from India that Tesla has not committed to investing in local production, despite incentives introduced last year to attract global automakers.
While confirming the absence of Tesla from India’s growing EV manufacturing ambitions, Kumaraswamy noted that the company will still establish two showrooms in the country and maintain a retail presence. Major automotive brands such as Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia have expressed interest in producing electric vehicles locally, according to the minister.
Tesla had participated in initial discussions regarding the EV manufacturing scheme but did not attend subsequent meetings, according to a government official cited by Press Trust of India. The comments follow former U.S. President Donald Trump’s earlier remarks suggesting it would be unfair for Tesla to build a factory in India rather than the U.S.
Tesla’s entry into the Indian market has faced multiple delays over the years. In 2022, its original plans were put on hold after the government insisted on local manufacturing instead of importing cars. Tesla had proposed starting with exports to gauge demand. In 2023, Musk stated he was “trying to figure out the right timing” to enter the Indian market. Earlier this year, he met Prime Minister Narendra Modi in Washington D.C., where they discussed potential collaborations in tech and innovation.
To encourage foreign investment, India reduced import duties on electric vehicles for companies willing to invest $500 million and begin local production within three years. Musk had previously criticized high tariffs as a barrier to Tesla’s expansion in India. However, analysts believe the Indian EV market may not yet be ripe for Tesla’s arrival. Electric vehicles account for less than 3% of total passenger vehicle sales in the country, and homegrown alternatives are often priced significantly lower than Tesla models.
Challenges such as inadequate charging infrastructure and poor road conditions could also hinder Tesla’s appeal among Indian consumers.
Currently, Tata Motors dominates India’s EV sector with over 60% market share, followed by MG Motors—owned jointly by India’s JSW Group and China’s SAIC—with 22%.
Globally, Tesla faces stiff competition from Chinese EV manufacturers like BYD. Its sales dropped to a three-year low in early 2025 following backlash linked to Musk’s political affiliations during his involvement with the Trump administration.
Musk recently announced his departure from his advisory role in the U.S. government.
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