NEW DELHI: Tesla has no plans to manufacture electric vehicles in India, Union Minister for Heavy Industries H.D. Kumaraswamy confirmed on Monday, as the government finalized its much-anticipated electric vehicle (EV) policy aimed at attracting global investment.
Speaking to reporters, Kumaraswamy said, “Tesla is not interested in manufacturing in India. We are not expecting anything from them in this regard.” The EV giant, led by Elon Musk, is currently focused on importing vehicles into India, despite having earlier expressed interest in local production.
The new EV policy, designed to encourage foreign automakers to establish manufacturing units in India, offers significant import duty reductions—from 70% to 15%—for companies committing to invest a minimum of $500 million. These firms must begin production within three years and meet specified local content requirements.
Although Tesla has not responded to India’s latest policy, other global automakers such as Mercedes-Benz, Volkswagen, Hyundai, and Kia have reportedly shown interest.
Under the policy, approved companies will be allowed to import a limited number of EVs at the reduced tax rate, provided they commit to setting up manufacturing facilities in India, currently the world’s third-largest auto market.
India’s EV sales remain modest, accounting for only 2.5% of total car sales in 2024, with Tata Motors leading the domestic segment. The government aims to increase this share to 30% by 2030, but infrastructure challenges like the lack of fast-charging stations continue to deter buyers.
Domestic manufacturers, including Tata Motors and Mahindra & Mahindra, who have already made substantial investments in EV production, have opposed steep import duty cuts, citing concerns over market distortion.
The new policy also includes limited incentives for research, development, and charging infrastructure, areas seen as critical for the growth of the EV ecosystem.
