Tech
Tesla Backs Out of India Manufacturing Plans – Minister Kumaraswamy Confirms Shocking U-Turn
New Delhi, India, June 2, 2025 – India’s hopes for a Tesla Gigafactory have been dashed. Union Minister of Heavy Industries HD Kumaraswamy announced that Tesla has no plans to set up manufacturing plants in India, a setback for the country’s electric vehicle (EV) ambitions and Make in India drive. The news, shared in Delhi, has sparked debate about India’s EV future. Here’s what happened and what it means.
Kumaraswamy’s Big Reveal
The minister was clear:
- “Tesla is not interested in manufacturing in Karnataka or any other state.”
- “Their focus is on existing plants in China and Germany.”
- “We offered attractive incentives, but Tesla declined.”
His words have quashed expectations of a major Tesla investment.
Why Tesla Said No
Several factors played a role:
- Import Duty Demands: Tesla sought lower taxes on imported vehicles, which India resisted, pushing for local production.
- Red Tape: Slow land approvals and complex regulations made India less appealing.
- China’s Edge: Tesla’s Shanghai Gigafactory, handling nearly half its global output, remains the priority.
These hurdles tipped the scales against India.
How This Hits India’s EV Dreams
The decision stings:
- Jobs Lost: Hopes for thousands of new jobs, potentially 10,000 direct roles, are gone.
- Investor Doubts: Other global EV makers may rethink India, wary of similar challenges.
- Silver Lining: Indian firms like Tata Motors and Ola Electric gain room to grow without Tesla’s competition.
The news reshapes India’s path to EV leadership.
Tesla’s Long India Story
Tesla’s India journey has been a rollercoaster:
- 2015: Elon Musk first hinted at entering India’s market.
- 2022: Plans stalled over high import duties and tax disputes.
- 2023: Musk met PM Narendra Modi, raising hopes for a factory.
- 2025: Tesla confirmed it will only open showrooms, not factories.
This latest twist marks a definitive shift.
Who Wins Now
Tesla’s exit opens doors:
- Chinese Brands: BYD and MG Motor could expand their foothold in India’s EV market.
- Local Heroes: Startups like Ather Energy and Ola Electric are scaling up production.
- Asian Giants: Toyota and Hyundai are investing heavily in Indian EV hubs.
These players stand to gain from Tesla’s absence.
What’s Next for India’s EVs
The government is regrouping:
- Policy Tweaks: Relaxed import rules might lure other global players.
- Battery Focus: Incentives for local battery manufacturing, part of the SPMEPCI scheme, are gaining traction.
- New Entrants: Vietnam’s VinFast is exploring a factory in Tamil Nadu, signaling fresh interest.
India’s EV journey is far from over.
