Tesla has chosen not to manufacture electric vehicles in India at this time while India works on establishing new policies to draw international automakers and expand domestic manufacturing capabilities.
The new electric vehicle policy of India provides substantial import tax reductions to foreign automakers who establish EV production facilities worth $500 million in the country. The policy permits foreign automakers to import restricted EV numbers at a lower 15% duty rate instead of the current 70% duty when they establish manufacturing facilities within three years.
The CEO of Tesla Elon Musk suspended his investment plans for India during the previous year because of high import duties and regulatory challenges. Heavy Industries Minister HD Kumaraswamy confirmed on Monday that Tesla does not currently show interest in the new policy. The minister stated that Tesla does not plan to manufacture in India because they lack interest in local production.
The new policy has received positive signals from Mercedes-Benz and Volkswagen and Hyundai and Kia which plan to establish local manufacturing operations. The domestic EV manufacturers Tata Motors and Mahindra & Mahindra strongly opposed the import duty reduction proposals.
The Indian government uses its EV initiative as a fundamental element to achieve climate targets and strengthen its automotive industry. The absence of Tesla from the market represents a lost chance for India to bring in one of the leading global electric vehicle manufacturers.
