Tesla is no longer expected to build electric vehicles in India despite government incentives and meetings with Elon Musk.
HD Kumaraswamy’s minister on Monday said that the US company has not shown interest in the Narendra Modi government’s new EV manufacturing scheme, indicating that the efforts that the automakers have fallen into were first recognized.
“Mercedes-Benz, Skoda Volkswagen, Hyundai and Kia are interested. Tesla, we don’t expect from them,” Kumaraswamy told reporters, adding that he is aiming to open two retail showrooms instead. “They are not interested in Indian manufacturing.”
Officials cited by news agency PTI said Tesla was involved in early discussions based on the country’s EV policy but did not participate in later rounds.
This clarification comes when the Modi government issued formal guidelines for its EV policy this week, cutting import obligations to foreign automakers who have pledged to invest at least $500 million and have pledged to start local production within three years.
This policy was originally designed to lure Tesla into the country to establish manufacturing in the country, over a year of work.
If an automaker commits to invest around $500 million in domestic manufacturing, it is permitted to import a limited number of EVs at 15% tax, versus the current 70%.

Musk previously said high import operations are preventing Tesla from entering the Indian market. He later met the Prime Minister. We discussed the possibilities in technology and innovation in Washington, DC and India.
But despite such outreach, Tesla has retreated. The original entry plan for the American company was shelved in 2022 after India claimed that it would start local production rather than importing vehicles for test runs. Musk later said he was “trying to figure out the right timing” for his investment.
Analysts argue that the Indian EV market may not be ready for Tesla’s premium model. Currently, EVs account for less than 3% of domestic passenger car sales, and domestic alternatives cost half of Tesla’s cheapest products.
Insufficient charging infrastructure and poor road conditions can also be deterrent.
Tata Motors currently dominates the Indian EV market with a share of over 60%, followed by 22% MG motors.
Globally, Tesla is facing increasing pressure from rivals, particularly China’s BYD. Sales fell to their three-year lows in early 2025 amid political backlash over Musk’s relationship with President Donald Trump. He resigned from his government advisory role last week.