Union Minister HD Kumaraswamy on Monday stated that Tesla does not plan to manufacture its electric vehicles in India anytime soon, despite the government's new EV policy aimed at attracting global automakers.

Speaking to ANI, Kumaraswamy stated, “They are not interested in manufacturing in India. This we had not expected from them. They are only starting showrooms.” His comments come amid growing anticipation over Tesla’s potential entry into the Indian market.

New EV policy

India recently unveiled a new electric vehicle policy, designed to boost local production and reduce dependence on imports. The policy offers major tax incentives to foreign companies that invest in domestic manufacturing.

Under the policy, automakers investing a minimum of $486 million (approx. ₹4,000 crore) in local EV production will be allowed to import a limited number of electric cars at a reduced import duty of 15%, down from the existing 70%. However, companies must begin local production within three years and meet specific localization requirements.

The scheme, officially named “Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI),” aims to make EVs more affordable, create jobs, and position India as a global EV manufacturing hub.

Mercedes-Benz and Volkswagen show interest

While Tesla appears hesitant, other global automakers like Mercedes-Benz and Volkswagen have expressed interest in the scheme. According to Kumaraswamy, both companies are exploring investment opportunities under the new policy framework.

Indian EV leaders push 

Indian manufacturers such as Tata Motors and Mahindra & Mahindra have already made significant strides in EV production. These companies have raised concerns over reduced duties for foreign players, citing potential harm to the domestic industry. In 2024, electric vehicles accounted for only 2.5% of total car sales in India, with around 1.1 lakh units sold out of 4.3 million. The government aims to increase EV penetration to 30% by 2030, aligning with its sustainability and energy goals.

Tesla's India journey remains uncertain

Tesla has long shown interest in entering the Indian market, but high import duties have been a major deterrent. CEO Elon Musk has previously described India's tariffs as among the highest globally.

Though the new EV policy addresses this challenge, Tesla seems focused on establishing showrooms and selling imported models for now. Without local production, the company may struggle to price its vehicles competitively against domestic brands. As Tesla holds back, the spotlight may shift to other international carmakers more eager to embrace India’s EV push.