New Delhi, June 4 — In a key update concerning India’s electric vehicle (EV) sector, Union Minister for Heavy Industries Mahendra Nath Pandey on Tuesday stated that Tesla Inc., the U.S.-based EV giant led by Elon Musk, has expressed no interest in setting up a manufacturing facility in India.
“Tesla has clearly said they are not interested in manufacturing in India,” Pandey told reporters. The minister’s statement comes amid ongoing discussions and speculation over the automaker’s potential entry into the Indian market.
Tesla had earlier sought tax concessions to import its vehicles before committing to manufacturing operations. However, the Indian government has remained firm in its stance that the company must establish local production facilities in order to benefit from reduced import duties.
India currently imposes steep import taxes on fully built vehicles, ranging from 60% to 100%, depending on the vehicle’s price and configuration. These tariffs have long been a point of contention in Tesla’s negotiation with Indian officials.
The government, under its “Make in India” initiative, has been encouraging global companies to invest in domestic manufacturing. Incentives such as the Production Linked Incentive (PLI) scheme and the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme are aimed at bolstering India’s EV ecosystem.
Tesla’s refusal to manufacture in India may reshape the dynamics of the Indian EV market. Domestic players like Tata Motors, Mahindra Electric, and startups including Ola Electric and Ather Energy have already gained substantial market presence with localized production and government support.
Industry observers suggest that Tesla’s decision could be influenced by India’s regulatory complexities and infrastructure gaps. Others see it as a strategic delay rather than a permanent withdrawal from the market.
Meanwhile, other global automakers such as Hyundai, Kia, and China’s BYD have shown increasing interest in establishing or expanding EV operations in India, further intensifying competition.
India aims to have electric vehicles comprise at least 30% of total vehicle sales by 2030, and the government is continuing discussions with several international manufacturers to attract investment into the sector.
With Tesla stepping back from its manufacturing ambitions in the country, the focus now shifts to companies willing to align with India’s EV vision and contribute to the growth of a sustainable and self-reliant automobile industry.
