Here’s some bad news for Tesla fans in India as the Ministry of Heavy Industries has thrown cold water on the Elon Musk-led company manufacturing electric vehicles in India. Speaking to PTI, Minister of Heavy Industries HD Kumaraswamy said that Tesla is not expected to manufacture its vehicles in India. As reported earlier, Tesla is expected to take the direct import route from its Berlin plant in Germany. The EV company is currently testing its Model 3 and Model Y in India and will soon make its official debut here.
New electric vehicle manufacturing policy
Kumaraswamy has announced that India is set to begin accepting applications as part of its new electric vehicle (EV) manufacturing initiative. This move signals the country’s readiness to roll out a fresh EV policy designed to draw major international automakers to invest and establish operations in India. The minister said that Tesla will only open showrooms in India and ‘sell imported cars’.
As reported by Reuters, the Central Government has finalised a new electric vehicle (EV) policy, permitting automakers to directly import EVs priced above $35,000 at a reduced import duty of just 15%. However, to qualify for these lower tariffs, companies must first commit to investing $486 million in establishing a manufacturing facility in India and begin producing locally made EVs.
To protect domestic automakers, the government has stipulated that global manufacturers must localise at least 25% of their EV components within the first three years, increasing to 50% within five years.
According to Economic Times, Kumaraswamy said that there are many automobile companies interested in manufacturing EVs in India, like Mercedes-Benz, Skoda-Volkswagen, Hyundai and Kia.
Tesla’s plans in India
Tesla has already finalised two showrooms in Mumbai and Delhi. The EV maker has secured a 4,000 sq ft commercial space in Mumbai’s prime Bandra-Kurla Complex (BKC). Tesla has reportedly secured this prime location with one of the highest monthly lease rates in the area, committing to a payment of around Rs 35 lakh per month (approximately Rs 900 per square foot). The lease agreement is set for a five-year term. In a further expansion move, Tesla is also preparing to launch a second showroom at Delhi’s Aerocity complex.
