Tesla has no current plans to set up manufacturing operations in India, according to Indian Minister of Heavy Industries H.D. Kumaraswamy, BBC reports.
The announcement came as the Indian government unveiled detailed guidelines for its electric vehicle (EV) manufacturing incentive scheme aimed at attracting global players.
Despite India offering incentives and holding multiple rounds of discussions, Kumaraswamy said Tesla appears uninterested in local production.
“Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest [in manufacturing electric cars in India]. Tesla – we are not expecting from them,” he stated.
This marks the first official confirmation that efforts to bring Elon Musk’s EV company into India’s manufacturing ecosystem have not materialized. A government official also told the Press Trust of India that while Tesla participated in the initial round of stakeholder meetings, it was absent from subsequent discussions.
Although manufacturing plans seem off the table, Tesla will reportedly establish a retail presence in India, with plans to open two showrooms.
Tesla has held intermittent talks with Indian officials over the years, with negotiations stalling in 2022 when the Indian government insisted the company manufacture vehicles locally rather than rely on imports. Tesla had argued for a phased approach, beginning with exports to test market demand.
In 2023, Musk indicated he was still evaluating the “right timing” to invest, and he met with Indian Prime Minister Narendra Modi in Washington, DC to explore potential areas of collaboration. However, industry analysts note that challenges such as high production costs, underdeveloped charging infrastructure, and low EV penetration in India—less than 3% of passenger vehicle sales—remain barriers to Tesla’s entry.
Price sensitivity is another factor. Indian consumers have access to more affordable, locally produced EVs, with Tata Motors leading the market and MG Motors in second place. Tesla’s models, which are priced significantly higher, may face difficulty competing.
The issue has also drawn attention in the US, with President Donald Trump stating in February that it would be “unfair” for Tesla to build a factory in India.
Globally, Tesla is navigating increased competition from Chinese automaker BYD and saw a drop in sales to a three-year low in early 2025. The company has also experienced reputational challenges related to Elon Musk’s political affiliations, though Musk stepped down from his US government advisory role last week.
