Union Minister for Heavy Industries HD Kumaraswamy announced Tesla will not establish manufacturing or production facilities in India. The electric vehicle giant plans to establish showrooms throughout India instead of manufacturing facilities. The minister declared that Tesla shows no interest in establishing manufacturing operations in India despite previous discussions about its potential plans.
The Indian government has recently launched an EV policy to draw global companies into the market. The policy provides a 15% import duty reduction to companies which establish manufacturing facilities in India with investments exceeding $500 million. The policy requires companies to purchase 25% of their components from local sources during the first three years before increasing this requirement to 50% by year five.
The SPMEPCI scheme has attracted Hyundai and Mercedes-Benz and Skoda and Kia as well as other major automakers who want to participate under this program. The minister announced that the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) will start accepting applications in the near future.
US President Donald Trump expressed his disapproval of Tesla’s India plans through his well-known stance against tariffs when Apple considered moving its production to India.
The reluctance of Tesla to establish operations in India demonstrates the ongoing difficulties India faces in attracting global electric vehicle leaders for domestic manufacturing.
