Tesla has decided against manufacturing electric vehicles (EVs) in India for now, opting instead to establish showrooms to sell imported cars. This was confirmed by Union Heavy Industries Minister H.D. Kumaraswamy, who stated that Tesla has shown no interest in setting up local production facilities despite India’s efforts to attract such investments through favorable policies .
In March 2025, the Indian government introduced a new EV policy offering significant import tax reductions—from 70% to 15%—for automakers committing at least $486 million to local manufacturing and commencing operations within three years. This policy was largely seen as an incentive for Tesla to establish a manufacturing presence in India . However, Tesla has not responded to these incentives.
Tesla’s decision to focus solely on imports may impact its pricing strategy in India due to high import duties, potentially making its vehicles less accessible to the average Indian consumer. Additionally, this move could affect local employment opportunities and the Indian government’s broader goals of boosting EV adoption and local production capabilities .
Despite Tesla’s current stance, other global carmakers like Mercedes-Benz and Volkswagen have shown interest in India’s EV market, and Indian companies such as Tata Motors and Mahindra & Mahindra continue to invest heavily in local EV production. The Indian government remains committed to its ‘Make in India’ initiative and aims to increase the share of EVs in the country’s car market to 30% by 2030 .
