Tesla Unlikely to Manufacture Cars in India in the Near Future – Union Minister HD Kumaraswamy

Tesla seems to be making steady progress towards its official launch in India, but the company will focus solely on selling imports and is not currently interested in local manufacturing, according to comments made by Union Minister of Heavy Industries and Steel, H D Kumaraswamy, at a media briefing in New Delhi today.

According to the minister, as quoted by ANI, Tesla is focused on opening its first two showrooms, which are confirmed to be coming up at Bandra Kurla Complex, Mumbai, and Aerocity, just outside New Delhi. The company has also been testing its Model Y on roads across the country, and just last week began advertising for Autopilot test drivers who will gather data for localisation. 

An exact launch timeline is not yet known, but the likelihood of the company investing in a new Gigafactory complex here has now dropped considerably. While Tesla is now not likely to even consider smaller-scale local manufacturing to take advantage of government incentives, it could still enter strategic tie-ups with local firms and suppliers. Earlier rumours suggested that cars sold in India would be imported from Tesla’s Gigafactory Berlin-Brandenburg facility in Germany.

The union minister’s comments were made shortly after the government introduced its new EV manufacturing scheme, aimed at establishing India as a global hub for electric passenger vehicle manufacturing and exports, with a ₹4,150 crore investment mandate. Responding specifically to a question about Tesla’s Make-in-India plans, he replied “We are not expecting it, they only want to start two showrooms. They are not interested in manufacturing in India.” A staffer subsequently clarified that the scope and scale of Tesla’s intentions to invest in India are not yet known, and this is only the situation at present. 

It’s possible that Tesla is being cautious with its plans, as US-based companies have been criticised by President Donald Trump for boosting offshore production capabilities. Most famously, Apple has been threatened with a 25 percent tariff on iPhones manufactured in India and imported to the US, which the company was relying on to circumvent higher tariffs on units made in China. 

News sources report that Tesla participated only in a first round of discussions with the Ministry of Heavy Industries about its Scheme to Promote Manufacturing of Electric Cars in India, after which representatives did not attend any meetings. Local manufacturing could allow the company to sell its cars here at lower prices, which would help it gain a foothold here even as it faces increasing competition and reduced demand in multiple parts of the world.

In contrast to Tesla’s apparent decision, Kumaraswamy cited the examples of Mercedes Benz, the Volkswagen Group, Hyundai Motor Company, and Kia Corporation, which are keen to expand their manufacturing operations here.