Elon Musk's India pitstop: ‘Make in India' is off the cards for now, but are Teslas going to be at least made for India?

Indian Express

17-07-2025

Tesla's first retail showroom might be as good as it gets for India, given the hoops that the country's policymakers jumped to get the marque automobile brand here. A brand new policy was pushed through early last year, dubbed by the industry as the 'Tesla Policy' to effectively yield to what CEO Elon Musk was pushing for: easing imports into India without an explicit guarantee to Make in India.
What makes it worse is that Tesla would be importing its Model Y saloon units from its Shanghai gigafactory in China, with no guidance on manufacturing in India. Tesla has no plans of starting production in India for the time being, Union Heavy Industries Minister H D Kumaraswamy had said last month. It is unclear whether Musk has given any further guidance to the Indian government on its manufacturing plans in India, but sources in the government indicate that there is nothing on that front.
Navigating Indian roads
There are also issues around whether the car would be tweaked in any way to better suit Indian conditions, which could be far more challenging than in most other countries where Tesla sells.
Take full self driving (FSD) as an example, for which the company proposes to charge Rs 6 lakh extra, over and above its duty-laden price of Rs 59-68 lakhs – double the saloon's sticker price in the US. What is unclear is whether the company has examined if FSD would work in India's traffic conditions, and where the data from its Indian customers would be stored. In China, for instance, Musk has made multiple unannounced visits to Beijing discuss the rollout of FSD software and permission to transfer data overseas. Tesla has been offering FSD for subscription in China for over four years, but with a restricted set of features that limit the system to operations such as automated lane changing or parking assist. Since 2021, Tesla has stored all data collected by its Chinese fleet in the country, as required by the ciuntry's regulators, and has not transferred any data back to the US. Musk has been desperately lobbying for an exemption on this. In India, there is little clarity on what Tesla's terms of use of the data are.
In the US too, auto safety regulators had opened an investigation into whether Tesla's recall in December 2023 of more than 2 million vehicles to install new 'Autopilot safeguards' was adequate following a series of crashes.
'The activation and use of these features are dependent on achieving reliability far in excess of human drivers as demonstrated by billions of miles of experience, as well as regulatory approval, which may take longer in some jurisdictions. As these self-driving features evolve, your car will be continuously upgraded through over-the-air software updates,' Tesla said on FSD.
Then there is the hardware of the car itself. Despite its 19-inch alloys, whether the ground clearance of the Model Y would be enough to negotiate India's pothole ridden roads remains to be seen. The versions sold in other markets has a ground clearance of 167 mm, which is pretty low for a car that is really long (4,797 mm in length).
There are more features that are out of sync with India's driving conditions. The version of the Model Y to be sold in India would have heated rear seats – definitely not a feature needed in Mumbai, or for that matter Delhi and Gurugram, the three places where the company hopes to retail its cars. The car has heated and cooled front seats.
Add to that the fact that the full-glass roof of the Model Y with no inside cover to cut the sun off is unlikely to fare well against India's summer heat. The company plans to install 16 DC superchargers in Mumbai, but that could be inadequate even if they sell a moderate number of cars. The company will give home chargers with the car. It has adopted the direct route to sell in India, and not the franchisee route, as is the case in other markets too.
China, global sales slumping
The company's entry into India also comes at a time when it is struggling in China, one of its key markets. Tesla's vehicle sales in China dropped 18% year-over-year between January and May 2025, with key rivals like BYD seeing a surge, and newer rivals like Xiaomi launching cars that can match Tesla's capabilities at a lower price point. While India is expected to be a small sales market for the company, relatively, it is no surprise that it is looking to expand to the one of the world's biggest automotive markets in hopes of finding new buyers.
A majority of Tesla's sales come from the US, with China contributing around 20%. In the recently concluded second quarter, Tesla's deliveries fell 13.5%, with the company seemingly headed towards a second year of shrinking sales, also dragged down by Musk's political affiliation. Besides, for many buyers, Tesla's lineup has become old, with no fresh model updates.
Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More
Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers' rights, privacy, India's prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More