Elon Musk-owned electric vehicle (EV) giant Tesla is “not interested in manufacturing in India”, the country’s heavy industries minister has said.

The remarks were made on Monday as the Indian government issued detailed guidelines for a scheme to promote EV manufacturing in the country.

This is the first time that India has publicly admitted that it has not been able to lure investment dollars from Musk, even after unveiling incentives for global EV giants last March.

Minister HD Kumaraswamy confirmed that Tesla would open two showrooms in India and have a retail presence.

“Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest [in manufacturing electric cars in India]. Tesla - we are not expecting from them,” Kumaraswamy said.

Another official told the Press Trust of India news agency that a Tesla representative had participated in the first round of stakeholder discussions for the manufacturing scheme but “was not part of the second and third round”.

The comments come on the back of US President Donald Trump saying in February that it would be “unfair” for the US if Tesla built a factory in India.

Over the years Tesla has had several rounds of negotiations to enter India.

The company’s original plans to open a base were shelved in 2022 after the Indian government insisted that Tesla make cars locally. The carmaker had said it wanted to export to India first so that it could test demand.

In 2023, Musk said he was “trying to figure out the right timing” to invest in the Indian market.

Musk met Prime Minister Narendra Modi earlier this year in Washington DC where the two discussed the “immense potential” for collaboration in technology and innovation.

Last year India cut import taxes on EVs for global carmakers which committed to investing $500m (£369m) and starting local production within three years. This came after Musk complained that high import duties were preventing the carmaker from entering India.

But analysts say the Indian EV market may not be mature enough yet for Tesla to invest locally - EV sales still make up less than 3% of overall passenger vehicle sales in India, and locally made alternatives can cost half of what consumers will have to shell out for Tesla’s base model.

Charging infrastructure and local road conditions could be further deterrents.

India’s Tata Motors currently leads India’s EV market with over 60% market share. MG Motors - jointly owned by India’s JSW and a Chinese firm - is second at 22%.
Globally, Tesla has been facing growing competition from Chinese players such as BYD.

Its sales plummeted to their lowest level in three years in the first three months of 2025 after a backlash against Musk and his role in the Trump administration.

Musk announced his departure from his government role last week.

Source: BBC
--Agencies