Tesla, Elon Musk’s electric vehicle company, has shown no interest in manufacturing in India.
In February, US President Donald Trump had said if Tesla planned to build a factory in India, it would be “unfair” to the US.
While outlining the government’s proposed scheme to step up manufacturing of electric vehicles in India, Union heavy industries minister H. D. Kumaraswamy on Monday said the US electric vehicle maker has so far only shown interest in opening showrooms in India.
“Tesla is not interested in manufacturing in India,” Kumaraswamy said.
The car maker has reportedly selected Mumbai’s Bandra Kurla and Delhi’s Aerocity as locations for its showrooms and had earlier advertised for hiring people in various roles in India.
The company had also begun the process of certification and homologation to sell electric vehicles in India. While representatives of the carmaker had participated in the first round of discussions on the Scheme to Promote Electric Cars in India (SPMEPCI), they were not present in the subsequent round of stakeholder deliberations.
Tesla is currently facing several challenges, having suffered a record 16 per cent drop in global production and a 13 per cent drop in total deliveries, with its profits plunging 71 per cent year on year during the first quarter of 2025. The car maker had said it would have to revisit its 2025 guidance during the second quarter amid difficulties in measuring the impact of shifting global trade policy on the automotive and energy supply chains.
However, its plans to introduce a more affordable vehicle remain on track, the company had said.
Several global car manufacturers, including the likes of Mercedes-Benz, Volkswagen, Skoda, Hyundai, and Kia, have already shown interest in manufacturing electric vehicles in India, Kumaraswamy said.
The government had notified the SPMEPCI on March 15, 2024 and on Monday, the heavy industries ministry said that the notice inviting applications under the scheme is proposed to be notified shortly, following which prospective applicants will be able to submit applications.
Scheme contours
In a bid to encourage global electric vehicle manufacturers to invest in India, the government plans to allow import of completely built units of electric four wheeler in India of a minimum value of $35,000 per unit at a reduced customs duty of 15 per cent (compared to current 70-100 per cent) for 5 years, with an upper cap of 8000 imports per year.
But, in order to avail the concessional duty, the companies would have to invest a minimum of ₹4150 crore to set up a manufacturing base to make electric cars in India, within 3 years of application approval. Moreover, companies would have to attain at least 25 per cent domestic value addition in 3 years and a minimum of 50 per cent in 5 years.
Investment towards the main plant building and utilities will be considered as part of the investment up to 10 per cent of the committed investment. However, the government has said that expenditure incurred by the company towards land will not be considered.
The union ministry of heavy industries said it will have the right to open the application window as and when required till March 15, 2026.