Union Heavy Industries Minister H.D. Kumaraswamy has clarified that Tesla is not interested in manufacturing cars in India. Tesla, led by Elon Musk, is a world-renowned electric vehicle company. The Indian government has now announced various schemes to promote electric vehicle manufacturing in the country. Guidelines for this have also been issued. However, the minister has directly stated that despite all these efforts, Tesla is not interested in setting up a factory and manufacturing in India. This is considered a shock to the efforts to welcome investment in India’s EV sector.
Official confirmation from the government that Tesla is not interested in manufacturing EVs in India
The Indian government recently released complete guidelines under the scheme to promote electric vehicle manufacturing in the country. Against this backdrop, Union Minister H.D. Kumaraswamy said on Tuesday that Tesla is not interested in manufacturing cars in India. This is the first time that the Indian government has officially revealed that it has not yet succeeded in its efforts to get world-renowned EV companies like Tesla to invest in the country. This is seen as a major setback for the Indian government’s aspirations in the EV sector.
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Minister’s statement
Union Minister H.D. Kumaraswamy said that Tesla plans to open only two showrooms in India, and these will be for retail only. While Mercedes-Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest in manufacturing electric cars in India, Tesla has not shown interest in manufacturing in India, he said. Also, an official speaking to the Press Trust of India said that while Tesla participated in the first round of consultations, it did not participate in the second and third rounds of consultations. This also confirms that Tesla is not involved in the India manufacturing plan.
Minister’s comments on Tesla after Trump’s criticism
The minister’s comments that Tesla is not interested in manufacturing cars in India have come after US President Donald Trump said that it would not be fair to the US if Tesla sets up a factory in India. With this, the government has also openly confirmed Tesla’s reluctance to manufacture in India. Trump’s comments further strengthen the current slowdown in Tesla’s domestic plans in India.
Tesla’s plan did not materialize in 2022 due to local production condition
While Tesla has been making efforts to enter India since 2017, in 2022, the Indian government imposed a condition that local production is mandatory for selling cars. This has led to the abandonment of Tesla’s initial plans for India. Tesla had said that it wanted to first test the demand in the Indian market through exports. But this condition led to the inability to implement those plans.
Tesla on the sidelines despite investment opportunities
In 2023, Elon Musk had said that they were exploring the right time to invest in India. In the same year, he met Prime Minister Narendra Modi in Washington and discussed joint efforts in the fields of technology and innovation. Subsequently, in 2024, the Indian government reduced import duties on the condition of investing $500 million to promote EV production and starting local production within 3 years.
This was a step taken to make up for the shortcomings that Musk had previously said that Tesla could not enter India due to high import duties. However, despite all these efforts, Tesla is currently not interested in manufacturing cars in India.
Why is Tesla hesitant to invest in India?
The main reason why Tesla is currently hesitant to set up a factory in India is that the Indian electric vehicle market (EV Market) has not yet grown significantly. Currently, electric cars account for three out of ten total cars sold in India. That is, EV sales are less than 3%. At the same time, electric cars manufactured in India are available at much lower prices than Tesla cars.
For example, for the money you would have to spend on a basic Tesla model, you can buy a car of the same class for half the price in countries like India. Similarly, the lack of electric charging stations and some roads that are not suitable for Tesla models are currently making Tesla think about investing in India.
Tesla faces stiff competition in India and globally
Tata Motors has captured the electric vehicle market in India with a 60% share. MG Motors, a joint venture between India’s JSW and a Chinese company, is in second place with a 22% share. Globally, Tesla faces stiff competition from established brands like Chinese company BYD. Also, in early 2025, the controversy surrounding Elon Musk’s stake in the Donald Trump-led government has negatively impacted Tesla, pushing its sales to a three-year low.
Last week, Elon Musk announced that he would be stepping down from his previous government responsibilities. This means that he will now be putting his power positions in the government on hold. This marks the end of his government duties.
