The Indian government is actively promoting the manufacturing of electric vehicles (EVs) in the country, but there is uncertainty surrounding Elon Musk’s Tesla. Despite the government’s efforts to attract foreign investment, Tesla seems to be taking a cautious approach. According to Union Minister for Heavy Industries and Steel H.D. Kumaraswamy, Tesla is only interested in opening two showrooms in India, one in Mumbai and one in Delhi, and has not shown any serious intention of setting up manufacturing facilities in the country.
In contrast, other global auto giants such as Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia have expressed interest in investing in EV manufacturing in India. They have responded positively to the government’s new EV policy, which offers incentives such as reduced import duties and tax benefits for companies that invest in local production. Under the policy, automakers can import up to 8,000 electric vehicles annually at a reduced import duty of 15%, provided they invest ₹4,150 crore in India and begin local production within three years.
Tesla, on the other hand, has only made preliminary moves in India, such as securing a site for a showroom in Mumbai and hiring over 25 employees. However, the company missed two key meetings with government officials, which has raised concerns about its commitment to the Indian market. Furthermore, former US President Donald Trump has warned Tesla that if it sets up factories in India to export cars to the US, it will not be allowed to do so without paying tariffs.
The Indian government is keen to promote EV manufacturing in the country and has offered attractive incentives to encourage foreign investment. However, Tesla’s lack of enthusiasm and commitment to setting up manufacturing facilities in India is a cause for concern. The company’s focus on opening showrooms rather than investing in local production raises questions about its long-term plans for the Indian market. As the government continues to promote EV manufacturing, it remains to be seen whether Tesla will eventually commit to investing in India or continue to maintain a cautious approach.