Tesla bails on crucial piece of India production, aims to rely on imports

Max Headroom 2025.06.03 3 min read

Tesla is bailing on a crucial piece of the puzzle that would likely enable the production of its vehicles in India, and will instead rely on imports, a bold strategy in the broader scheme, as the country has prioritized local manufacturing in an effort to bolster its economy.

The automaker has dragged its feet to commit to a localized production strategy in India, something that seemed to be the only pathway to a mass market presence in what is the most populous country in the world.

However, Tesla has evidently made a decision on what its plans for the market will be. It seems apparent that it still wants to sell vehicles in India and establish a presence there, but it will not do it in what many would consider a more traditional sense: building vehicles domestically. This is something the company has sparred with the Indian government on for several years.

Now, it’s made up its mind.

During a press conference earlier today, India’s Heavy Industry Minister, Shri Kumaraswamy, confirmed Tesla’s plans for how it will penetrate the massive Indian market, and it will not be doing so through domestic manufacturing:

India’s Heavy Industry Minister, Shri Kumaraswamy, says Tesla is not interested in local manufacturing in the country: pic.twitter.com/O03fqkAMQ0

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Kumaraswamy indicated that Tesla has no interest in building cars in India, but it wants to establish some presence there, especially with showrooms, allowing citizens to see and drive the cars they could buy from the company.

The move comes as India has made major progress in reducing the import duties that have frightened many automakers from doing business as importers. India’s massive import duties on vehicles built in other countries doubled prices, which is a significant reason for Tesla’s delay in entering the market.

India is considering a reduction to just 10 percent from 100 percent, which would be significant for companies like Tesla, which are doing whatever they can to enter the market without feeling the impact of the duties.

Electric vehicles made up just 2.5 percent of sales in 2024. There were 4.3 million vehicle purchases in India last year.

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