Tesla is not interested in manufacturing electric cars in India, says Union minister HD Kumaraswamy

Akash Patil

02 Jun 2025, 04:12 PM

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Heavy Industries Minister HD Kumaraswamy has stated that Tesla is unlikely to manufacture vehicles in India anytime soon. The minister made the remarks at a press conference to announce the unveiling of guidelines for the Scheme to Promote Manufacturing of Electric Cars in India.

Kumaraswamy has announced that India is set to begin accepting applications as part of its new electric vehicle (EV) manufacturing initiative. This move signals India’s readiness to roll out a fresh EV policy designed to draw major international automakers to invest and establish operations in India.

The minister added that Tesla is only keen to set up showrooms in India. Tesla is reportedly not considering local manufacturing at this stage.

However, the American auto giant is keen on establishing showrooms in the country. He mentioned that U.S. President Donald Trump has remarked that if Tesla were to set up a factory in India to sidestep the country’s tariffs, it would be deemed “unfair” to the United States.

The company has begun the process of certification and homologation to sell its EVs in India and is expected to roll out its first car in the market within the next two to three months.

Earlier this year, Tesla had finalized showroom space in Mumbai and Delhi and posted listings for over two dozen jobs.

While Tesla seems to be reluctant to set up manufacturing units in India, companies such as Mercedes-Benz, Skoda – Volkswagen, Hyundai and Kia have shown interest in building electric cars in India.

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Mercedes-Benz, Volkswagen-Skoda, Hyundai, Kia show interest

Mercedez, Volkswagen, Skoda, Hyundai and Kia have shown interest in applying under the SMEC. The application widow under the scheme is likely to open next week, and will remain open for 120 days. However, the government can reopen the window as and when required till March 15, 2026.

The guidelines announced under SMEC require the applicants to invest USD 500 million or Rs 4,150 crore in the next three years. Other conditions include minimum 25% domestic value addition (DVA) in three years and 50% in five years. A total of 8,000 cars can be imported every year at 15% duty for five years. The government estimates Rs 6,484 crore revenue forgone per applicant under the scheme.

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