Tesla is preparing to enter the Indian market but will wait for the government to revise its policy on imported electric vehicles, a move that could determine the models it offers in the country, Bloomberg reported.
The U.S. electric vehicle maker plans to import a few thousand cars to Mumbai in the coming months, with the Model Y being a likely candidate for launch. However, local reports suggest Tesla may introduce its rumored ‘Model Q’ instead. The final decision will depend on the outcome of ongoing tariff discussions between India and the United States, including a potential reduction of the maximum 110% import duty.
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Elon Musk accelerated Tesla’s India entry plan after meeting Prime Minister Narendra Modi at the White House last week, Bloomberg said. While details of their discussion remain undisclosed, India’s Ministry of Heavy Industry (MHI) is reportedly considering revising the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI). Under proposed changes, automakers may be allowed to import up to 50,000 electric cars annually at a reduced 15% customs duty, up from the current limit of 8,000 units.
To benefit from SPMEPCI, companies must invest at least 4,150 crore rupees ($456 million) in local EV manufacturing and meet domestic value addition targets, reaching 50% within five years. The government is expected to finalize and announce these policy changes in the coming weeks.
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Government officials expect Tesla representatives to visit India in April for high-level discussions with the Prime Minister’s Office and key ministries. The EV maker is reportedly planning an initial investment of $3-5 billion for a local manufacturing facility.
Tesla has shortlisted Maharashtra and Gujarat as potential sites for its Indian plant. Within Maharashtra, the company is evaluating locations in Chakan and Chhatrapati Sambhaji Nagar, where Volkswagen and Mercedes-Benz already operate manufacturing plants. Gujarat, another key automotive hub, is also under consideration.
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Tesla is also working on establishing a retail presence in three major metro cities—Delhi, Mumbai, and Bengaluru—targeting a sales launch in the third quarter of 2025, coinciding with India’s festive season. The company is in the process of finalizing showroom locations and hiring staff for sales, service centers, charging infrastructure, and R&D.