4 days Ago
India Says Tesla Will Not Be Allowed to Invest in Local Production
It is first time that Indian government accepted that their plan of making Tesla to invest in India had not materialized. On Monday, Minister Kumaraswamy claimed that Tesla is "not interested in manufacturing in India," but the company is expected to open two showrooms and retail outlets.
"Companies such as Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest," Kumaraswamy said. "Tesla — we're not counting on them." Tesla participated only in the inaugural meeting called by the Indian government to discuss the plans for EV manufacturing, an official said, speaking on the condition of anonymity, and later skipped these rounds of talks, the person added.
The revelation follows India's moves to incentivize EV manufacturing locally, which included slashing import taxes for companies that invest at least $500 million and start manufacturing in less than three years.
Hurdles Await Tesla in India's EV Market
Prospective India entryTesla had earlier put India entry plans on hold in 2022 on the back of the government's demand for local manufacturing. The company chose to test demand by initially importing vehicles. Although CEO Elon Musk had visited Prime Minister Narendra Modi in Washington last year for talks on potential cooperation, they did not come to any agreement.
Analysts cite several hurdles for Tesla in India: weak electric vehicle adoption (at less than 3% of passenger vehicle sales), inadequate infrastructure for charging and price-sensitive consumers. Tesla's models are far more expensive than those of local competitors such as Tata Motors, which has a 60% share of India's electric vehicle market.
Tesla is also under global pressure. In early 2025 its sales fell to a three-year low as it faced increased competition from Chinese brands such as BYD and criticism of Musk's political connections. Musk himself resigned from a U.S. government advisory role in recent months in response to public uproar.
