India’s Heavy Industries Minister HD Kumaraswamy said on Monday that Tesla does not plan to build electric vehicles in India. While the company will open two showrooms and have a retail presence, it has opted out of the government’s latest EV manufacturing scheme, despite generous incentives.
This is the first time Indian officials have publicly admitted Tesla’s lack of interest in local production. Kumaraswamy pointed out that Mercedes-Benz, Hyundai, Kia, and Skoda-Volkswagen have all shown strong interest, but Tesla has not.
The Press Trust of India was told by an official that Tesla was present at the start of the talks but did not participate in later rounds. In 2022, Tesla stopped its plans in India because the government required local manufacturing. Musk wanted to start exporting vehicles to see how the market would respond.
In 2023, Musk mentioned that he was still considering the right moment to invest and met Prime Minister Modi in Washington, DC. In 2022, India lowered import duties for EV makers who promised $500 million and began production within three years, after Musk complained about the high tariffs.
Yet, analysts think that Tesla may not find the Indian EV market attractive because electric cars are only a small part of the total sales. High costs, not enough places to charge, and poor roads are still major problems. Tata Motors is the leading manufacturer in the market with 60%, and MG Motors comes in second with 22%.
Tesla is encountering increasing competition from Chinese EV companies such as BYD. In early 2025, the company’s sales reached a three-year low, partly because of criticism over Musk’s connexion to the Trump administration, which he recently left.
