Tesla's Manufacturing Plans in India Unlikely, Says Union Minister

Tesla's Focus Shifts to Showrooms in India

Tesla, the electric vehicle company founded by Elon Musk, is reportedly not planning to establish production facilities in India. Union Heavy Industries Minister HD Kumaraswamy stated that the company is primarily concentrating on expanding its showroom presence across the country.

Despite Tesla's hesitance, several global automakers, including Hyundai, Mercedes-Benz, Skoda, and Kia, are keen on setting up manufacturing operations in India, encouraged by the country's new electric vehicle policy.

The new EV policy offers a 15% customs duty exemption for companies investing USD 500 million to build manufacturing plants in India. Additionally, these companies are required to source 25% of their components locally within the first three years, increasing to 50% by the fifth year.

Kumaraswamy mentioned that the application process for the Scheme for Promoting Manufacturing of Electric Passenger Cars in India (SPMEPCI) will commence shortly.

Impact of Tariffs on Tesla's Plans

Former US President Donald Trump's tariff policies had previously indicated that Tesla's intention to open a factory in India would be considered 'very unfair.'

Similarly, Apple CEO Tim Cook faced challenges when contemplating a shift of production to India due to rising tariffs on imports from China.

Tesla has been exploring the possibility of manufacturing in India for several years, with Elon Musk highlighting that the country's high import duties pose significant obstacles to the company's expansion efforts.