3 days ago
Tesla not keen to manufacture in India: Minister HD Kumaraswamy
Electric Vehicle (EV) major Tesla is not interested in manufacturing in India but is looking at opening two stores, Union Heavy Industries Minister H D Kumaraswamy said on Monday.
He, however, said that global EV makers like Mercedes-Benz, Volkswagen-Škoda, Hyundai and Kia have shown interest in applying under the ministry's flagship Scheme to Promote Manufacturing of Electric Passenger Cars in India, notified in March last year.
'Mercedes-Benz, Volkswagen-Škoda, Hyundai and Kia — all these companies have already shown interest. Tesla, we are actually not expecting from them. They (Tesla) are going to start two showrooms, they are not interested in manufacturing in India,' Kumaraswamy said at a media briefing.
In February, US President Donald Trump had criticised Tesla's plan to expand in India, calling it 'unfair' to the US. 'Now, if (Tesla CEO Elon Musk) built the factory in India, that's okay, but that's unfair to us. It's very unfair,' he had said. Trump has since made similar objections to Apple's expansion plans in India.
The heavy industries ministry also issued detailed guidelines on Monday under the EV manufacturing scheme, and will soon issue a notice inviting online applications. Under the scheme, approved applicants will be required to make a minimum investment of Rs 4,150 crore to produce EVs domestically, with defined domestic value addition (DVA) goals.
In turn, they will be eligible to import a maximum of 8,000 completely built-in units (CBU) of electric four-wheelers per year, with a minimum import value of $35,000 at a reduced Customs duty of 15 per cent for a five-year period. The scheme is limited to global manufacturers with a revenue of at least Rs 10,000 crore per year, with fixed assets valued at a minimum of Rs 3,000 crore.
'The scheme is strategically crafted to position India as a global hub for electric vehicle manufacturing… By mandating domestic value addition targets, the scheme will further boost the 'Make in India' and 'Aatmanirbhar Bharat' initiatives, while empowering both global and domestic companies to become active partners in India's green mobility revolution,' Kumaraswamy said.
Earlier, many believed the scheme was envisaged to attract Tesla to manufacture in India, after it complained of high duties on car imports, which can go up to 110 per cent.
Shortly after the scheme was announced in March 2024, in the run-up to the Lok Sabha polls, Musk was expected to visit India and make a pledge to pump over $2 billion into a car manufacturing facility in the country. However, the visit was postponed after Musk cited 'very heavy Tesla obligations'. But, a few days after cancelling his India trip, Musk visited China — the company's second-largest market.
In February this year, days after Prime Minister Narendra Modi met Musk in Washington, Tesla announced 13 job openings in India, including store manager, service advisor, business operations analyst, and customer engagement manager.
As Tesla mulls over its operational goals in India, the company is facing increased competition from Chinese EV makers, particularly BYD, as global EV sales growth has tapered.
Meanwhile, according to think tank Global Trade Research Initiative (GTRI), it could take years before the first batch of EVs manufactured under the Centre's scheme hit the market. 'While announcement of the scheme guidelines is a positive step, the application process has not opened yet and is expected soon. Realistically, it may take another six months or more before selected firms are announced, and the first locally made EVs under this scheme are still some time away; for now, approved firms can keep importing fully built cars at the reduced 15% duty,' GTRI said in a release.
