Amidst India’s plans to invite applications under a new EV manufacturing policy, heavy industries minister HD Kumaraswamy has said that Tesla is unlikely to manufacture in India soon, despite securing showroom space and job listings, reports The Economic Times.
“Tesla only wants to open showrooms and sell imported cars,” he said, adding that companies that have shown interest in making EVs in India include Mercedes-Benz, Skoda-Volkswagen, Hyundai and Kia.
Under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), companies are allowed to import a limited number of EVs at a lower import duty of 15% (versus the current 70%) if they commit to investing US$486 million (RM2.1 billion) to build EVs in the country.
US President Donald Trump said in February that any plans Tesla may have to open a factory in India would be “very unfair.” The American EV brand has been wanting to enter India for years, but Elon Musk has deemed the country’s high import duties a major barrier.
ET notes that while Tesla’s gigafactories could boost India’s manufacturing and tech sectors by producing EVs, batteries and charging solutions locally, the carmaker’s direct sales model may need to be adjusted for dealer-centric India, after-sales needs to be robust and the bulk of the nation’s price-sensitive passenger car market is below two million rupees (RM99k).
On the last point, ET cited JSW MG Motor India CEO emeritus Rajeev Chaba as saying that Tesla needs better pricing and value-driven offerings than even in China if it wants more than a token presence in India.
Tesla cars sold in India will likely be German imports, at least to begin with, adding a similar amount to the sticker price in duties, unless Trump arm-twists India into cutting tariffs. A cheaper ‘Model 2’, which has been rumoured for years, may not happen if news coming out of China is to be believed, where Tesla is trying to reignite demand with a stripped-down version of the Model Y instead of a whole new car.
Although a mere 3% of total vehicle sales in India are passenger EVs, sales have grown from 5,000 units in 2020 to over 113,000 in 2024, and Tesla could tap into this momentum, particularly in the premium segment, Jato Dynamics automotive consultancy president Ravi Bhatia told ET.
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No point to have a manufacturing center in India. The population cant even afford a normal car, you expect an ev car. I think Elon have better sales selling cow in india than ev car.
Tesla now is in deep kaput situation everywhere.
Better invite Chinese carmakers instead.
Wait, that will hurt India’s pride even further.
No manufacturing in India means Tesla pays 100% duty. The brat who said people can’t afford to buy cars in India, India is the 4th largest car market in the world with about 4 million cars sold annually. What Malaysia sells annually is old in India in couple of months.
India is the 4th largest economy with over $4 trillion GDP. Keep dreaming.