Tesla has decided against building electric vehicles in India, instead opting to enter the world’s most populous market through imports and retail showrooms, according to India’s Minister of Heavy Industries.
The move signals a shift in the company’s long-delayed approach to expanding in a country that has prioritized domestic manufacturing as a core part of its economic strategy.
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The announcement, made earlier today by Minister Shri Kumaraswamy, confirms that Tesla will not establish a local production facility in India, despite years of discussion with the government. The automaker, however, still aims to establish a presence in the market by opening showrooms to allow Indian consumers to experience its vehicles firsthand.
Tesla’s decision comes as India considers lowering its import duties on foreign-built electric vehicles to as low as 10 percent, down from the current 100 percent. The high tariff structure has long been cited by automakers, including Tesla, as a key barrier to market entry. A cut in import taxes could significantly ease costs for companies relying on exports to India, potentially making Tesla vehicles more price-competitive in the market.
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India recorded 4.3 million vehicle sales in 2024, with electric vehicles accounting for just 2.5 percent of the total. Tesla’s strategy to bypass domestic manufacturing may allow it to test the market with limited risk, though it remains to be seen how the decision aligns with the Indian government’s Make in India initiative, which seeks to build up local industrial capacity.
🚨 India’s Heavy Industry Minister, Shri Kumaraswamy, says Tesla is not interested in local manufacturing in the country: pic.twitter.com/O03fqkAMQ0
— TESLARATI (@Teslarati) June 2, 2025